Mortgage broker or straight to the bank: which is better for a first home buyer?

The short answer: a mortgage broker compares loans across many lenders and, since 2021, is legally bound by a Best Interests Duty to recommend what suits you — and they're usually free to you, because the lender pays them a commission (which they must disclose). Going direct to a bank means one lender's products and rules, and you do the shopping yourself. For a simple, salaried borrower either works. But the moment anything is complicated — self-employed income, a low deposit, a first-home scheme place — a broker usually earns its keep by knowing which lender will say yes. It isn't all-or-nothing: not every lender is on every broker's panel, so you can use a broker and sanity-check a direct online rate.

Meet Hannah and Leo, again

When we last sat with Hannah and Leo, they'd just had the cold shower every couple with uneven income gets: their own bank — where Hannah's salary lands each fortnight — ran the numbers and came back low, because it shaded Leo's self-employed income hard. Hannah's a salaried marketing coordinator; Leo's a self-employed carpenter, good money but variable. One bank, one set of rules, one disappointing number.

So they faced the question everyone faces once: keep pushing with their own bank, or bring in a broker?

Hannah and Leo aren't real people — but their situation is. Every rule and number in this story is real and linked to its source below.

What a broker actually does

A broker sits between you and a panel of lenders — often twenty or thirty, from the big banks to smaller ones you've never heard of. Instead of you filling in application after application, the broker takes your situation once and works out which lenders will lend to you, on what terms, then handles most of the paperwork through to settlement.

The value isn't really "finding the lowest rate" — plenty of rates are public. It's that every lender has different rules, and a good broker knows them: which one accepts a shorter self-employed history, which counts overtime, which has first-home scheme places left, which won't touch a 5% deposit and which will. Matching your situation to the right rulebook is the job.

Who pays the broker — and the duty that protects you

Here's the part that surprises people: a broker is usually free to you. Lenders pay brokers a commission for bringing them a loan, so in most cases you don't hand over anything (Moneysmart). Occasionally a broker charges a fee directly — if they do, they must tell you up front, in writing.

"But doesn't commission bias them?" It's the right question, and it's why the law changed. Since 2021, mortgage brokers are bound by a Best Interests Duty — they must legally act in your best interests when recommending a loan, not chase the fattest commission, and they must disclose the commissions they'll receive. It's fair to ask directly: how do you get paid, does it differ between lenders, and why is this loan in my best interests? A good broker welcomes the question.

Why it mattered for Leo's income

This is where a broker stopped being optional for Hannah and Leo. Their own bank had one policy for self-employed income, and it was conservative — it wanted two full years of tax returns and used the lower year. A broker who works with self-employed clients knew that a different lender on the panel would accept Leo's most recent year with an accountant's letter, and read his income far more generously.

Same couple, same Leo, same carpentry income — a materially bigger, and honest, borrowing number, simply because someone knew which door to knock on. That's the self-employed borrower's edge with a broker: you're not stuck with the first lender's opinion of your income.

When going direct is perfectly fine

None of this makes the bank the wrong answer. Direct has real merits:

• If you're straightforwardly salaried with a solid deposit, your own bank may approve you quickly, and an existing relationship can occasionally help.
• Some online-only lenders aren't on broker panels and advertise sharp rates — going direct is the only way to reach them.
• You keep it simple — one relationship, no middle party.

The honest move for many first home buyers is both: let a broker do the legwork across the panel, and separately check a direct online rate or two, so you know the broker's recommendation stacks up.

The first-home-scheme wrinkle

One more reason a broker helps a first home buyer specifically: the Australian Government 5% Deposit Scheme and Help to Buy only run through participating lenders, and scheme places can be limited — a broker who's placed scheme loans before knows which lenders still have room and how to package the application. The First Home Super Saver Scheme and First Home Owner Grant aren't tied to a particular lender, but a broker who's seen them before can still help you sequence the paperwork so neither one holds up settlement. See the full rundown of first home buyer schemes in Australia — deposit scheme, shared equity, super saver, grants and stamp duty, in one place.

How it played out

Hannah and Leo used a broker — and it wasn't about shaving a few points off the rate. The broker found a lender that accepted Leo's income properly and had a 5% Deposit Scheme place, turning their disappointing bank number into a budget that matched what they could genuinely afford. They still checked one direct online rate to be sure, and the broker's recommendation held up.

The question that settled it wasn't "broker or bank?" in the abstract. It was quieter: whose rulebook actually says yes to us — and who'll do the running to find it? For a couple with one messy income, that answer pointed clearly to a broker.

If you're like Hannah and Leo

This is exactly where Havenli hands you off well. When you're ready to turn a rough budget into a real approval, Havenli connects you with a mortgage broker — one who'll compare lenders, work with your actual income (self-employed included), and know which lenders have first-home scheme places. General guidance up front, then the right professional at the right moment. See how Havenli works, or revisit how much a couple can really borrow.

This story is general information, not financial, legal or credit advice — Hannah and Leo aren't real people, their numbers are illustrative, and your circumstances will differ. Lending criteria, broker arrangements and scheme rules change; always confirm the current details with the official sources linked above, and talk to a licensed broker or lender for advice on your situation.