What is a finance broker?
A finance broker is a licensed finance professional who acts as an intermediary between borrowers and lenders. Rather than going directly to a single bank, you engage a broker who has access to a panel of lenders and can compare hundreds of loan products on your behalf.
In Australia, finance brokers must hold an Australian Credit Licence (ACL) or be authorised as a Credit Representative under an ACL holder. They are regulated by ASIC. Loan Hive is subject to the Best Interests Duty, which means we are legally required to act in the best interests of our customers when providing home loan advice.
How is a broker different from a bank?
When you go directly to a bank, their staff can only offer you products from that bank's range. They are employees of the bank and their job is to sell the bank's products. They cannot tell you that a competitor offers a better rate.
A finance broker, by contrast, has a legal obligation to act in your best interests. We compare products from our entire lender panel and recommend the option that best suits your needs, objectives and financial situation.
How are brokers paid?
For home loans, brokers are paid by the lender when your loan settles. There are two types of commission:
- Upfront commission: A one-time payment made by the lender at settlement, typically between 0.55% and 0.65% of the loan amount (net of offset balance).
- Trail commission: An ongoing annual payment while your loan remains active, typically around 0.15% per year of the outstanding balance.
For residential home loans, we are paid entirely by the lender and there is no cost to you. For other loan types such as car loans, asset finance or personal loans, commission structures vary by lender and product, and a broker fee may apply. All commissions and any applicable fees will be disclosed to you in your Credit Quote before you proceed.