Secret Home Loan Rates: The Mortgage Broker Commission Hack
The absolute cheapest home loan rates aren't advertised. They are broker-only. Here is the secret hack to use a commission rebate broker and keep the cash.
Want to secure the cheapest home loan rates in Australia? Here's the uncomfortable truth: the absolute best deals are often hidden from the public. Banks reserve their lowest interest rate mortgages for brokers, paying them fat kickbacks to bring new business through the door.
These broker kickbacks come in two main flavors:
- Upfront commission: Typically around 0.65% of the total loan amount.
- Trailing commission: Around 0.15% to 0.20% paid to the broker every single year for the life of your loan.
But here is the ultimate hack: you can grab these wholesale rates and keep the kickbacks for yourself. You just need to use a commission rebate mortgage broker.
Wait, how do they make money if they give you the commission? Easy. They work on a fee-for-service model. They charge you a flat, upfront fee (usually between $2,000 and $4,000) to secure your loan, and then refund 100% of the bank's commissions back into your bank account.
This fee-for-service model removes the conflict of interest where a broker might steer you to a lender just because they pay a higher commission. While $4,000 sounds steep, paying an independent mortgage broker Australia can save you tens of thousands of dollars over the life of your mortgage. It's a no-brainer investment.
The Banking Royal Commission recommended banning these dodgy broker commissions, but sadly, Australian politicians lacked the backbone to implement the changes. Until the law catches up, you can take matters into your own hands.
Here are two Australian fee-for-service services that rebate commissions back to clients:
To estimate how much commission your bank is paying your broker, read this detailed breakdown on Mates Rates Mortgages cashback models.
Finally, run your numbers through the government's official Moneysmart mortgage switching calculator to see how much cash you'll pocket by switching to a cheaper rate.
Stop letting brokers buy sports cars with your mortgage. Demand your rebate!
