A mortgage broker should help you cut costs and give you more options, whatever your budget. Unfortunately, that’s not always the case. Switching brokers can break you out of a bad home loan deal. In this article, we’re going to cover:
Can you switch mortgage brokers?
Definitely. You may feel like your broker is serving themselves more than you, and you could be right. Sometimes, the broker’s commission from certain banks creates a conflict of interest, and they may not be giving you the best deal.
The following factors may influence your broker:
- Your broker’s commission (both upfront and ongoing), which will be a percentage of your loan
- Their panel of lenders, as certain banks may offer brokers a higher commission
- Your loan type, as banks may offer brokers a high commission for certain home loans
If your broker is pushing you to stay with a loan or bank, they might be getting a higher commission on it.
What you’ll need to know
If you’re comfortable doing your own research, it’s also worth checking out the lowest mortgage rates on the market. For instance, if your mortgage is 2-3 years old, you’re probably paying more than you need to. Right now, mortgage rates are at a record low because of COVID-19. Has your broker said anything about shopping around to refinance?
The general rule of thumb is to ask a broker why. Why do they work with this set panel of lenders? What are their commissions? What are their reasons for their recommendations? You can also ask them to provide these details in writing.
A new broker will probably want to refinance your home loan, meaning switch banks. You’ll need to understand what that may cost. Does your current home loan have a discharge fee? Will there be upfront or ongoing fees with the new home loan?
Many people find this process overwhelming. We recommend meeting with brokers in-person to help get your head around all the different costs and savings of refinancing (check out our refinancing explainer here). Brokers should also help you through the paperwork you’ll need to complete.
Support for making the switch
Switching can seem daunting. That’s why we’re here to help, as ethical brokers with free services. We can help you define your financial situation and determine the best deal for you right now on the market.
Why ethical brokers? We’re not driven by our commission. Instead, we invest up to half of our upfront commission in the work of our charity partners, such as Habitat for Humanity Australia or Save the Children. This donation is made on your behalf, making it tax-deductible for you.
By partnering with charities instead of banks, we put you and the community first. Talk to us today to figure out if you should switch and how. We’ll cut through the financing talk and help you save on your home loan.
Disclaimer: The information provided is general in nature and does not constitute financial advice. Please speak to us for recommendations on your individual circumstance and requirements.