Documents ready. Are your loan priorities clear?

ASIC says mortgage brokers arrange 81% of new residential mortgages in Australia. Its current review of the best interests duty focuses on whether recommendations work for a customer's circumstances and priorities, include wanted or needed features, and are appropriately priced against other offers.

That is why a complete document pack is only the first step. Payslips, statements and identification help a broker understand the file; a clear brief helps you test whether the recommendation is genuinely suitable for the way you plan to use the loan.

Write the brief before the meeting

Must-haves — features or arrangements you are not prepared to lose, such as a repayment method you know you will use.

Nice-to-haves — features you could give up if another option has a more suitable overall cost or structure.

Decision priorities — the order in which you will weigh total cost, flexibility, lender access and timing.

Four questions to ask

1. Which lenders can—and cannot—you access? A lender panel is the range available to the broker, not the whole market by default.

2. What are the other suitable options? Moneysmart says a broker should present more than one option and explain how each loan works and what it costs.

3. Why does this option fit my priorities? ASIC says the reasons for a recommendation should be documented and explained to the customer.

4. What is the total cost? Compare the interest rate together with fees, feature costs and the way you expect to use the loan. The lowest rate is not automatically the cheapest loan or best value.

A simple decision example

One loan may have a lower headline rate but no offset account; another may charge more but include a feature you expect to use every month. The better comparison starts by deciding whether that feature is essential, then assessing rate, fees and total cost together. This example is general only—actual value depends on the borrower, loan and usage.

Bottom line

Documents make the file easier to assess. Clear priorities make the recommendation easier to test. Before the meeting, write three must-haves, two optional features and the cost question you most want answered.

Sources

Australian Securities and Investments Commission — The best interests duty: A blueprint for building trust

Moneysmart — Using a mortgage broker

General information only. This is not financial advice. Loan options and eligibility depend on your personal income, liabilities, assets and lender assessment criteria.