Do I have to pay to use a broker?
There are a lot of misconceptions that mortgage brokers charge hefty fees. Generally this is not the case. Typically a mortgage broker will be paid by the lender (ie no additional cost to you) in the following way:
Why use a mortgage broker?
Simply put, a mortgage broker’s job is to find you the right loan for your situation and make sure that you continue to have the right loan as your goals and situation change over time.
What makes us different?
| Wagstaff Finance | Banks & lenders | |
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Your own personal, non-bank affiliated home loan expert |
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Free for you1 |
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We work in your best interests (we’re not owned by a bank) |
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Fast turnaround times2 |
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Access to over 60+ banks and lenders in one place3 |
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Ongoing support and guidance once your loan has settled4 |
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Mortgage brokers are paid an upfront commission and a trail payment:
- UPFRONT PAYMENT PAID TO ME BY THE LENDER, NOT BY YOU. A one-off payment called an upfront commission is usually between 0.65% to 0.7% of the loan amount (+gst). We do all the legwork to get your loan approved.
- TRAIL PAYMENT PAID TO ME BY THE LENDER, NOT BY YOU. ‘trail’ or ongoing commission is usually 0.15% p.a., based on the balance of your loan. We’ll be in regular contact with you to check in on your situation and make sure your loan continues to work hard for you, your changing situation and goals.
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How that plays out
Let’s say you choose to take out a $500,000 loan with Bank ABC.
I will be paid:
- An upfront commission of $3,250 (based on a 0.65% upfront payment rate)
- A trail payment of:
- $750 in the first year with a loan balance of $500,000
- $675 in the second year if your loan balance was $450,000
- $600 in the third year if your loan balance was $400,000
The trail payment will continue until you pay off your loan or your loan is changed. It will also cease if your loan ever enters in to default or arrears.