How do you get the cheapest home loan rate? Well, the very lowest interest rate mortgages are only available to brokers. You see banks and other lenders give brokers a special commission if they send customers their way, this comes in two forms:

  1. Upfront commission of about 0.65%
  2. Ongoing trail commision paid every year of about 0.2%

Now, listen up, here’s how you can also gain access to these discounted rates…use a broker that rebates these commissions back to you.

So hang on a minute, how do they make money on this I hear you cry!?

Simple, they charge an upfront fee to find you the best deal. The one big advantage this gives is that it removes the conflict that could arise when one lender gives more commission to the broker than another lender which would have been a better deal for the customer. The upfront fee by the way sounds pretty hefty at about $4000 AUD, but considered as an investment that could save you 5-10% of your loan it could well be worth it!

I totally agree with the Royal Commission’s recommendation to ban all commissions, it just a shame that the main Australian political parties don’t have the balls to implement these changes.

These are two brokers I’ve found in Australia that rebate their full commissions:

  1. http://www.independentmortgageplanners.com.au/
  2. https://justinbrand.com.au/mortgages/

And this page gives you an idea of how much commission your lender has paid your broker:

https://matesratesmortgages2.com/what-is-a-cash-back-mortgage/

Finally use the excellent MoneySmart calculator to see how much you might save:

https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/mortgage-switching-calculator