Mortgage brokers need to do more to show why they recommend a home loan when a cheaper alternative is available, according to a new ASIC review. However, the regulator found broker practices were broadly in line with its guidance.
With more than 80% of home loans now arranged through brokers, ASIC said that influence carries an obligation to act in borrowers’ best interests. Report 840 examined 13 credit licensees across eight large aggregator groups, which together represent roughly two-thirds of Australia’s mortgage broker representatives. ASIC drew on data from April 2023 to March 2025.
Seven of the eight groups reported that their brokers did not put forward the cheapest option in more than one in five cases. ASIC accepted there can be valid reasons for this, such as loan features that offer greater benefit, but found instances where the supporting evidence was missing.
“The greater the cost difference, the stronger the evidence needed to show the recommendation is in the consumer’s best interests,” ASIC Commissioner Alan Kirkland (pictured left) said.
Kirkland added that licensees should closely monitor recommendations made under their licence.
Industry bodies argued that a higher price can be justified. Finance Brokers Association of Australia (FBAA) CEO Leo Gagic (pictured center) said self-employed borrowers who can’t provide standard income evidence may need a low doc loan, even at a higher price.
Mortgage & Finance Association of Australia (MFAA) CEO Anja Pannek (pictured right) agreed that cost matters but said “the lowest-cost loan is not necessarily the right loan for every borrower”.
Pannek cited MFAA data showing brokers facilitated 838,815 residential home loans worth $495.55 billion in 2025, with broker market share now at a record 81.6%.
Both associations also highlighted the report’s finding that brokers showed no apparent steering towards lenders paying higher commissions.
“That is a positive finding for our profession and deserves recognition,” Gagic said.
Pannek said the sector’s track record of few complaints and minimal claims under the Compensation Scheme of Last Resort deserved recognition. She nonetheless backed practical fixes to complaints processes, provided ASIC’s expectations match the level of risk.
The regulator’s review, however, found that complaints about the duty took longer to resolve than other complaints.
“Our review found complaints being missed, withdrawn without being fully investigated, or delayed,” Kirkland said.
Both associations said they would help members respond, with the MFAA preparing guidance and FAQs and the FBAA pointing to its education programs.
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