Government-guaranteed lending is a specialist skill. Most branches do not handle it well, and a generalist broker may not know which lenders actually offer it. Here is what to ask, what to avoid, and how brokers are paid.
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Most people shop for a broker on price. For low-deposit lending, price is the least important variable. Ask these first:
On a $600,000 loan that commission is roughly $3,300–$4,500, and it is built into the interest rate. You pay the same either way; the question is only whether a broker finds you a better rate than you would have found alone.
A broker's commission is a percentage of the loan, not a percentage of what they save you. They earn the same whether you get 6.1% or 6.4%. There is no built-in reason for them to spend forty hours running rate comparisons that might save you $8,000 over thirty years.
Good brokers do it anyway. The way to find out is to ask: "Can you run a rate comparison across your panel for my file, and show me the options even if they're the same lender?" If they hesitate, you have your answer.
| Check | How | What a problem looks like |
|---|---|---|
| Credit registration | Ask for their credit registration number. All Australian credit brokers must hold one — unregistered credit broking is a criminal offence | No number, or vague answer |
| Professional membership | Look for MFAA, the Australian Mortgage and Finance Association, or a state industry association | No membership in anything |
| Panel size | Ask for a number, not a claim of "access to all lenders" | "We can access any lender" without a figure |
| Fee to you | Ask directly | Any fee, however described |
| Written comparison | Ask for the rate comparison in writing, after they have your file assessed | Verbal assurances only |
The large broker aggregators — including Mortgage Choice, Aussie Home Loans, Loan Market and the MFAA network — let you enter your details once and receive offers from multiple brokers. This is a reasonable starting point for price comparison, but be aware that these are lead databases: your details are distributed, and several brokers may contact you.
Common, and usually competent, because they work with local brokers daily. The conflict is structural — they receive a referral fee — but it rarely produces bad advice. Ask the same three questions you would ask anyone.
A solo broker with a large panel and a low-deposit specialism is often the best option for your situation, because low-deposit lending is a narrower skill than general broking.
Worth considering as an alternative to broking entirely. Credit unions are mutuals, so they are not paid commission and have no lender-panel incentive. Several are active on low-deposit lending, though income caps and property caps often apply. Ask directly whether they offer the scheme you need.
If you are in WA or SA, look at Keystart and HomeStart before anything else. They are government-backed, offer 2% deposits with no LMI, and exist specifically to serve buyers the banks decline. They are not brokers, they are the lender, and there is no commission structure to consider.
A broker cannot assess you without these, and having them ready saves a week:
Government-guaranteed lending is three different products with different documentation and different lenders: the 5% Deposit Scheme, the Family Home Guarantee (single parents, 2% deposit) and Help to Buy (shared equity, income caps). Tell the broker which one you need at the first call. "I have a small deposit" is not enough — you need the specific product name.
When a broker earns their fee, and when going direct is better.
What banks actually assess, and what to fix first.
The ten weeks after you sign, and what can still go wrong.
See what deposit you actually need for any state.
We are not a broker, lender or introducer, and we receive no commission or referral fee from any financial product. Nothing on this page is financial advice or a credit recommendation. Credit licensing obligations are set out in the National Consumer Credit Protection Act 2009. Check a broker's credit registration and professional membership before engaging them, and obtain independent advice for your own circumstances.