This morning the corporate regulator released a report most home owners will never read. It’s called Report 840 and it asks one simple question: are mortgage brokers acting in their clients’ best interests?
Short answer? Generally, yes.
Longer answer? There’s room to do better. And I think both halves of that answer are good news for you.
First, what is the ‘best interests duty’?
Since 1 January 2021, the law has required every mortgage broker in Australia to act in your best interests when recommending a home loan. Where your interests and the broker’s interests pull in different directions, yours must come first. It’s a legal obligation with real penalties behind it (in industry-speak it’s called ‘BID’).
The duty came out of the Banking Royal Commission. The idea was simple. If you’re trusting someone to help with one of the biggest financial decisions of your life, they should be on your side of the table.
What did ASIC look at?
ASIC reviewed eight of the largest broker groups in the country. Together they cover around two-thirds of all brokers in Australia. It looked at two years of data, including loan recommendations, how groups supervise their brokers and how they handle complaints.
That is a big sample. And it’s worth knowing that more than 80% of home loans in Australia are now arranged through a broker, so this review covers how most Australians get their mortgage.
What did it find?
ASIC found brokers’ practices generally lined up with its guidance. It also found three areas to tighten:
- Showing the working. In seven of the eight groups, brokers recommended a loan other than the lowest-cost option in more than 20% of cases. Sometimes the file didn’t clearly show why.
- Supervision. ASIC wants licensees to keep a closer eye on recommendations, particularly where a cheaper loan was available.
- Complaints. Complaints about the best interests duty took longer to resolve than other complaints. Some were missed or delayed.
That first point might sound alarming. It isn’t, necessarily. There are good reasons a loan with a slightly higher cost can suit you better. An offset account could save you more in interest than the rate difference costs. A lender might accept your self-employed income when the lower-cost lender won’t. ASIC’s point is fair: if a broker recommends a dearer loan, you should be able to see why. The bigger the cost difference, the stronger the reason needs to be.
So who’s checking the bank?
This is the part that rarely gets said.
When you walk into a bank branch or ring a bank’s lending team, the person you speak to is not bound by the best interests duty. Banks and non-bank lenders have to follow responsible lending laws, which means the loan must be ‘not unsuitable’ for you. That’s a lower bar than ‘in your best interests’. And a bank can only offer you its own products.
Getting a loan direct from a bank is a bit like buying shoes from a store that only stocks a few sizes. The staff may be lovely (and many are). They can still only sell you what’s on their shelves.
A broker has to look further than one shelf. Then they have to be able to show you why the loan they recommend suits you. Then the regulator checks.
Where the duty stops
I’d rather you heard this from me. The best interests duty doesn’t guarantee you the lowest rate on the market. It doesn’t mean every broker gets every file right either, which is exactly why ASIC is checking. What it does mean is that your broker is legally required to put you first and to be able to prove it.
What this means when you work with us
At Time Home Loans we compare loans from a panel of 50+ lenders. When we recommend a loan, we’ll show you the options we looked at and explain why the one we recommend suits your situation. If it isn’t the lowest-cost option, we’ll tell you what you’re getting for the difference.
We’re paid by the lender through commission and we never charge you a broker fee. We tell you how much we’re paid before you go ahead. And if you’re ever unhappy with our advice, tell us. Our complaints process is on our website and we take it seriously.
Hot Tip: Whether you use a broker or go straight to a bank, ask these four questions before you sign anything:
- What other loans did you compare?
- Why is this loan the right one for my situation?
- How are you paid for this loan?
- What will this loan cost me over five years compared with the alternatives?
A good broker will answer all four without blinking. Food for thought.
If you’d like a second opinion on your current loan, or you’re getting ready to buy, book a complimentary chat with our team.
Time Home Loans Pty Ltd ABN 53 161 695 012 is an Authorised Credit Representative 529395 under Australian Credit Licence 384324. This article is general information only and does not take into account your objectives, financial situation or needs. Consider whether it is appropriate for you before acting. Source: ASIC Report 840, released 13 October 2026.