How To Become A Mortgage Broker in Australia (Step-by-Step Guide)

To become a mortgage broker in Australia, you must complete a Certificate IV in Finance and Mortgage Broking (FNS40821), choose an aggregator, and obtain a Credit Representative status or an Australian Credit Licence (ACL).

You must also join an industry body like the MFAA or FBAA and complete a mandatory two-year mentorship.If you have a knack for numbers, a passion for property, and the drive to build strong relationships, mortgage broking can be a highly rewarding career.

Below is your complete A-Z guide on starting your broking career, understanding the costs involved, and maximizing your earning potential.

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Quick Steps to Become A Mortgage Broker

To capture the essentials, here is the exact 6-step pathway to kickstarting your career as a registered mortgage broker:

• Obtain your Certificate IV in Finance and Mortgage Broking (FNS40821)
• Choose between working as a PAYG employee or becoming a self-employed broker
• Partner with an aggregator to gain access to a panel of lenders and essential software
• Apply for your own Australian Credit Licence (ACL) or become a Credit Representative under your aggregator’s licence
• Become a member of the MFAA or FBAA and secure Professional Indemnity (PI) Insurance
• Complete a mandatory 2-year mentorship program required for all new brokers

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How to Become a Mortgage Broker in Australia (Step-by-Step Guide)

If you are transitioning from another industry or moving over from a traditional banking role, follow these detailed steps to ensure you meet all legal and compliance requirements set by the Australian Securities and Investments Commission (ASIC).

Step 1: Complete the Required Education (Cert IV & Diploma)

Before you can legally provide credit advice, you must meet minimum educational standards.

You are required to complete the Certificate IV in Finance and Mortgage Broking (FNS40821). This course covers the fundamentals of lending legislation, loan calculations, and basic risk assessment.

If you plan to run your own brokerage or simply want to elevate your industry expertise, it is highly recommended to also complete the Diploma of Finance and Mortgage Broking Management (FNS50320). Many premium aggregators now require the Diploma as a minimum standard.

Step 2: Decide Between PAYG vs. Self-Employed

New brokers must choose how they want to operate in the industry.

PAYG Employee: Working for an established brokerage provides a base salary, administrative support, and warm leads. In contrast, your commission splits will be much lower. This is generally the safest route for your first 1–2 years.

Self-Employed: Operating as a sole trader gives you the potential to keep 100% of your commissions and build an asset. However, you are responsible for generating all your own leads and covering all setup and compliance costs.

Step 3: Choose an Aggregator

An aggregator acts as the intermediary between you and the banks.

Partnering with an aggregator can help you gain access to a diverse lending panel of more than 40 banks and lenders. Aggregators can also provide the CRM software you need to lodge applications, run compliance checks, and even track your commissions. Choosing the right aggregator is critical to your long-term success.

Step 4: Obtain Licensing (ACL vs. Credit Rep)

To comply with the National Consumer Credit Protection Act 2009 (NCCP Act), you must be properly licensed to give credit advice.

Most new brokers start as a Credit Rep. This means you operate under the umbrella of your aggregator’s Australian Credit Licence (ACL). It is faster, cheaper, and comes with heavy compliance support.

Holding your own ACL directly with ASIC gives you total independence. However, it requires rigorous auditing, higher costs, and strict internal compliance frameworks.

Step 5: Join an Industry Body & Secure PI Insurance

You cannot lodge loans without being a registered member of a recognized industry association.

You must join either the Mortgage and Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA). To maintain this membership, you must complete at least 30 hours of Continuing Professional Development (CPD) annually.

Additionally, you are legally required to hold Professional Indemnity (PI) Insurance to protect yourself against claims of negligence or incorrect credit advice.

Step 6: Find a Mortgage Broker Mentor

You cannot operate entirely on your own from day one.

According to MFAA and FBAA regulations, all new brokers with less than two years of experience must complete a mandatory 2-year mentorship program.

Your mentor will review your loan applications, guide your compliance processes, and help you navigate complex lending policies.

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Mortgage Broker Salary and Earning Potential

The median salary for a mortgage broker in Australia is around $53,000 per annum, but high-performing established brokers regularly earn well over $150,000.

Your earning potential is ultimately dictated by your employment model (PAYG vs. Self-Employed) and your total settled loan volume.

Upfront and Trail Commissions Explained

Mortgage brokers do not typically charge the borrower a fee. Instead, they are compensated directly by the lender in two ways:

Upfront Commission: A one-off payment made by the bank when the loan successfully settles. This averages between 0.60% and 0.70% of the total loan amount.

Trail Commission: An ongoing, passive income stream paid monthly for the life of the loan (as long as the borrower does not refinance or pay off the loan). This averages around 0.15% per annum based on the remaining loan balance.

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The Costs of Becoming a Mortgage Broker

Starting a self-employed broking business requires initial capital. While PAYG brokers often have these costs covered by their employer, self-employed brokers should budget for the following setup costs:

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The Pros, Cons, and Realities of a Broking Career

The pros include a flexible work/life balance, the opportunity for uncapped income, and the immense satisfaction of helping everyday Australians achieve homeownership.

However, the realities of the industry can be harsh.

Did you know that only 35% of brokers continue into their second year of broking?

The first year is notoriously difficult. Building a pipeline of leads takes time, and you will work significantly longer hours than a standard bank employee for less immediate pay.

Furthermore, you must possess a rare combination of traits: the charisma and resilience of a salesperson, combined with the meticulous, analytical mind of a credit assessor.

For those who survive the initial grind, it generally takes 5 to 10 years to build a massive trail book, establish a steady referral network, and become a truly exceptional broker.

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Resources for new brokers

How to find leads

Did you know that around 80% of your marketing efforts end up losing money?

Often times brokers are good at generating new business but have no idea of how to retain business (repeat customers) or how to ask for referrals.

Most of the industry is also woefully underprepared for the challenges of internet marketing.

It’s a technology that can allow you to easily expand your reach.

However, target the wrong audience and your value proposition can fall on deaf ears and you could be spending thousands on unqualified leads or no leads at all!

Generating good quality mortgage broker leads is daunting but there are a number of strategies that you can employ from today.

Better yet, why not join us?

At Home Loan Experts, we use very intelligent marketing that’s laser-focused on specific niches and is designed to generate high-quality leads.

Useful websites

• Home Loan Experts: Our industry-leading website covers home loan lending policies and provides guides, tools, and calculators to specific niches.
• MFAA CPD activities: This schedule explains how MFAA members are required to maintain at least 30 hours of CPD hours per year.
• FBAA Mortgage Broker Training Centre: The FBAA is a partner of two of the largest RTOs in Australia.
• Connective: One of the leading aggregators in Australia with almost 40 lenders on their lending panel.
• Scott and Broad: Insurance brokers that provide tailored PI, public liability, and other insurance solutions for finance professionals.
• The Adviser: Covers the latest news and provides insight into current issues affecting the mortgage broking and banking industry.
• Mortgage Professional Australia (MPA): Covers the latest news and provides insight into current issues affecting the mortgage broking and banking industry.

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Key industry stats

Mortgage broking snapshot

During periods of low interest rates, the demand for mortgage brokers soars because the banks are desperate for more business.

For the past few years, the MFAA quarterly report has consistently revealed that brokers originate more than half of new residential home loans.

Similarly, annual growth from 2012 to 2017 has been around 6.8% (IBISWorld, January 2017).

The ‘2018 Mortgage Broking Benchmarking Report’ by Macquarie also suggested that the industry has matured, marked by an increase in the number of brokerages or franchisees with more than 2 staff.

What is driving profits in the broking industry?

Macquarie’s survey found that the biggest factor in increasing revenue is from referral business (65% of individual brokers), followed by referrals from referral partners such as real estate agents, conveyancers and accountants (52%).

Reasons for decreased profits are driven by deteriorating market conditions (49% of respondents) and cost increases (45%), with increased competition at 30%.

The costs of doing business can skyrocket during periods when economists and regulators perceive a housing bubble. In 2018 the increasing cost of regulation had a major impact on most brokerages and aggregators.

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Competition among mortgage brokers

There are over 17,500 mortgage brokers in the industry (‘Mortgage Brokers in Australia’, IBISWorld, January 2017).

The latest state breakdown estimates from the MFFA are as follows:

• NSW: 35.4%
• VIC: 27.9%
• QLD: 15.7%
• SA: 7.0%
• WA: 13.0%
• TAS: 0.6%
• NT: 0.6%

There is a lot of competition out there!

Luckily, many of the ‘cowboys’ of the industry, or brokers who have consistently broken compliance rules and have generally been unethical, are being forced out of the industry thanks to the regulatory framework provided by ASIC.

On top of that, it’s estimated that around 17% of all brokers in Australia didn’t even settle a new loan over the 6-month period from March to September 2015 (‘Industry Intelligence Service (IIS) Report’, MFAA).

This suggests that there is a good majority of registered brokers that are “dormant” or part-time.

Threats to the industry

According to ‘Observations on the value of mortgage broking’ by the MFFA [May 2015]:

• Consumers prefer online banking and lenders are always investing in new technologies to enhance the customer experience.
• Broker commissions are under scrutiny by ASIC and customers may be unwilling to accept a fee-for-service model.
• Increasing regulation and auditing, particularly for living expenses and interest-only loans.
• Consumer demand for a single product to cover all of their financial needs has created revenue concentration in a handful of products.

What makes a good brokerage?

According to Macquarie’s survey, by far the most important thing to a broker was what the brokerage was doing to actively manage its existing client base (72%), whether it was through automation or admin support.

The next most important thing was the brokerage’s ability to clearly articulate their value to clients through effective marketing and communication such as sales scripts (48%).

Satisfaction with aggregators

• IT support: 82% satisfied.
• Help with compliance: 80% satisfied.
• Training – both business management of personal development, credit and loan writing: 75% satisfied.
• Software: 73% satisfied.
• Lead generation: More than 50% were either not satisfied or very unsatisfied.

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What do Australians really want from brokers?

Although they see brokers as having a wider range of lending options, consumers don’t necessarily see brokers as having complete independence or impartiality (‘Observations on the value of mortgage broking’, MFFA).

When rates rise, the after-settlement services that a broker can provide really count.

Around 40% of respondents in MPA’s ‘Consumers On Brokers’ survey said they haven’t been contacted by their broker since settling their loan and over half weren’t notified when interest rates increased.

Further to this, 60% said they would like to be contacted more regularly but it has to be timely and relevant to their situation, not just generic e-newsletters.

This is where great brokers can really shine and build a good reputation in order to drive more business.

You have to ask what value you are providing post-settlement to justify trail commission.

What was really evident from the survey was that you had to earn the trust of your client.

Many said they were a little apprehensive when it came to the objectivity of a broker, with the perception that commissions would sway their judgement.

It was only after they had a great experience that they came to trust the broker.

But this certainly wasn’t at a group level, which is incidentally the reason why consumers prefer personal recommendations above all else.

What do brokers really think of banks?

According to MPA’s ‘Brokers On Banks 2016’ survey [7 April 2016], the major pain points for brokers included:

• The demand for faster turnaround times.
• More BDM support.
• More flexible credit policies so they could assist more clients.
• Opportunity to negotiate interest discounts.

It’s worth noting that many lenders, particularly the banks, have automated loan processing.

The problem is that bank staff are generally poorly-trained and don’t fully understand the role of the broker.

As a result, applications still get stuck in these automated systems.

This is why having a good relationship with a BDM is crucial in getting the application moving again.

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How is Home Loan Experts different?

If you would like to know more about a mortgage broking role at Home Loan Experts, please email careers@homeloanexperts.com.au.