How To Become A Mortgage Broker In Australia?

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Students want to know how they can become licensed mortgage brokers in Australia.

 

Are you a people person with an interest in real estate, an analytical mind, and a passion for helping people? Then a career as a mortgage broker can be worth exploring.

 

Mortgage brokers are accredited financial advisors who work in real estate to facilitate mortgage agreements between lenders and borrowers. They perform detailed research on the mortgage industry and property market and connect homebuyers with homeowners to help them get the best possible deal.

 

You usually must complete a Certificate IV in Finance and Mortgage Broking, apply for an Australian Credit Licence, and join a professional association like a Mortgage and Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA).

 

In this blog, we explore the mortgage broker's duties, the specific skills and qualifications requirements, the average salary range, the job outlook, and how to become one. We also share answers to some frequently asked questions.

 

 

1. What Are Mortgage Brokers?

 

Mortgage brokers are licensed financial advisers who are intermediaries between lending institutions and borrowers. They guide their clients on the best options for lenders, home loans, and interest rates.

 

They are employed by banks and mortgage broking organisations, where their responsibilities include researching various aspects such as features, fees, options, and charges related to mortgage loans for both housing and investment properties. Their goal is to identify the most suitable loan options for their clients.

 

Mortgage brokers provide clients with independent and ongoing advice and support for pre-approval and settlement of a new home loan and refinancing current mortgages.

 

Typically, they receive a commission based on the business they generate for their lending institution, specifically when borrowers sign a loan with that institution.

 

 

2. What Are The Duties Of A Mortgage Broker?

 

As a mortgage broker, you may carry out the following tasks to help individuals secure home loans:

 

  • Gather information from the prospective homeowner concerning income, credit history, monetary payment parameters, and expectations. 

  • Verify their client's financial statements.

  • Assess the clients' financial situations and personal needs to determine their borrowing ability. 

  • Research and compare home loan packages on lender fees, terms, and closing costs to present borrowers with favourable options

  • Provide unbiased advice to clients about the most suitable home loan options available.

  • Educate clients on the loan process, the required documentation, and the projected timeline for their loan approval

  • Assist prospective borrowers in gathering essential documentation for submission to the lender.

  • Facilitate and manage the loan application and settlement process.

  • Apply for mortgage loans with lenders on behalf of their clients. 

  • Offer guidance for improving a credit score before presenting the loan application to a lender.

  • Ensure loans follow existing laws and regulations. 

  • Teach prospective borrowers about the real estate and lending market and how it impacts their home buying or refinancing chances.

  • Do closing paperwork with a mortgage lender, insurance broker, and the title company

  • Establish and maintain professional relationships with lending institutions to recommend them to clients.

 

 

3. What Skills You Need To Become A Mortgage Broker?

 

You need both technical knowledge and soft skills to pursue this role:

 

 

Technical Skills

 

  • Good understanding of finance laws, regulations, and the existing financial climate. 

  • Good mathematics skills to do quick calculations and understand the theory behind the processes.

 

 

Soft Skills

 

  • Good Customer service skills

  • Strong social and interpersonal skills 

  • Able to communicate well with people of different ages and backgrounds 

  • Proficient negotiation skills to effectively connect lenders, financial companies, and clients/potential buyers to secure profitable loans for clients

  • A high level of time management and organisation skills to manage your workload, provide a quality loan approval process, and maintain and access necessary documents ready.

  • Sales and marketing skills to market and sell your expertise and attract clients to use your services. 

  • Attention to detail to review the fine details of loan options, rates, and terms to present profitable mortgage opportunities to clients.

  • Patience 

  • Able to stay positive in the face of lender rejections.

 

 

4. Mortgage Broker Qualification Requirements In Australia

 

Becoming a Mortgage Broker in Australia typically involves a series of steps that include obtaining an approved qualification, acquiring a license, and gaining work experience under the guidance of a mentor. Here's a summary of the process to qualify for this role:

 

  • Complete an approved qualification such as a Certificate IV in Finance and Mortgage Broking (FNS40821).

  • While a Diploma in Finance and Mortgage Broking Management (FNS50320) is optional for licensing, some employers prefer brokers with both Cert IV and diploma qualifications for this role.

  • Apply for an Australian Credit Licence through the Australian Securities and Investments Commission (ASIC).

  • Become a member of a professional association such as the Mortgage and Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA). It will help you obtain mentorship from a practising Mortgage Broker through the initial two years of your professional journey.

 

 

5. Steps To Become A Mortgage Broker In Australia

 

Here are the steps to follow to get started in this role:

 

 

Step 1: Learn About Mortgage Broking

 

Before committing to a Mortgage Broker profession, gaining knowledge about mortgages, finance, and sales is beneficial.

 

Consider reading related publications such as Mortgage Professional Australia, The Adviser, and Australian Broker to understand the profession and whether it suits your skills, interests, and career aspirations.

 

 

Step 2: Get Qualified

 

If you find fit for this role, the next step is gaining the entry-level qualification to get a licence to work in this field.

 

There are two courses to start this career:

 

  • Certificate IV in Finance and Mortgage Broking It is an introductory course that covers a range of industry-relevant techniques and concepts and gives you the foundation to launch your profession.

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  • A Diploma of Finance and Mortgage Broking Management is ideal for learning more skills, working in more senior roles, or opening your own business.

 

Students who have completed Certificate IV in Finance and Mortgage Broking can apply for a credit transfer of specific units when enrolling in the Diploma of Finance and Mortgage Broking Management.

 

Both qualifications qualify you to apply for membership in the Finance Brokers Association of Australia (FBAA) or the Mortgage & Finance Association of Australia (MFAA).

 

 

Step 3: Get Insurance

 

Along with a mortgage broking qualification, you must obtain professional indemnity insurance of at least $1,000,000 per claim and $2,000,000 in aggregate.

 

 

Step 4: Become Accredited

 

Now that you have been educated and obtained professional indemnity insurance, the next step is to join an industry body, i.e., MFAA or FBAA, as an Associate Credit Advisor.

 

These are the two national bodies for professional finance and mortgage brokers, aggregators, and mortgage managers.

 

A membership with these professional bodies will give you the accreditation to work with prominent Australian lenders.

 

 

Step 5: Choose an Aggregator

 

Now that you are accredited as an Associate Credit Advisor, the next step is to find a connected and helpful Aggregator.

 

It is essential as an Aggregator can mentor you and provide you access to a panel of lenders, business tools, platforms, and professional services for the first two years of your career.

 

Their assistance will prepare you to find clients, offer projects, and help make a successful broking career.

 

 

6. Work Environment Of A Mortgage Broker

 

Mortgage brokers usually work in an office where they meet their clients, other mortgage brokers and specialists, and finance and insurance institutions. 

 

They may meet potential clients at their businesses or in another mutually agreed location.

 

Brokers usually work alone or within a small team in general office hours of 9 am to 5 pm, Monday to Friday.

 

They spend much time on calls with financial institutions, clients, and other brokers after business hours. Based on their client's needs, they may have to work irregular hours, at night or on weekends.

 

 

7. Job Outlook Of Mortgage Brokers In Australia

 

Mortgage broking is a robust industry in Australia with a billion-dollar market and dedicated clientele.

 

The industry has strong growth prospects over the next few years to 2026, as most home buyers seek assistance from mortgage brokers when making life-changing decisions about buying a home.

 

As mortgage brokers don't charge their clients and get paid by the lender, many home buyers like to take advantage of their free and reliable guidance.

 

At present, there are 58,300 finance brokers employed in Australia. The government projects a job growth rate of 14.2% or 6,000 new jobs in the profession between 2021 to 2026.

 

 

Working Arrangements

 

Around 81% of people employed as Finance Brokers (ANZSCO ID 222112) work full-time for an average of 47 hours per week in their primary job.

 

 

Main Industries of Employment

 

  • Financial And Insurance Services: 94.5%

  • Professional, Scientific, And Technical Services: 1.6%

  • Rental, Hiring, And Real Estate Services: 1.0%

  • Agriculture, Forestry, And Fishing: 0.6%

  • Other Industries: 1.5%

 

 

Employment Across Australia

 

  • NSW: 33.5%

  • VIC: 26.4%

  • QLD: 17.9%

  • SA: 6.4%

  • WA: 13.2%

  • TAS: 0.9%

  • NT: 0.5%

  • ACT: 1.2%

 

 

Worker's Age and Gender Profile

 

The average age of Finance Brokers is 44 years, with most between 45 to 54 years. Females constitute 28% of the workforce which is 20 percentage points less than the average of all jobs, i.e., 48%.

 

 

8. How Much Does An Australian Mortgage Broker Earn?

 

The Pay Scale data shows Australia's average mortgage broker salary is AU$60,598 annually.

 

Their actual earnings may fluctuate based on their expertise level, the area of specialisation in finance, their geographic location, years of experience, and the employer.

 

 

Salary Based on Experience

 

  • Entry-level (Less than 1-year experience): AU$51,453 per year

  • Early career (1-4 years of experience): AU$58,917 per year 

  • Mid-career (5-9 years of experience): AU$68,407 per year 

  • Experienced (10-19 years of experience): AU$73,302 per year 

  • In their late career (20 years and above): AU$70,000 per year

 

 

Highest Paying Cities for Mortgage Brokers in Australia

 

  • Melbourne: $106,357 per year

  • North Sydney: $103,295 per year

  • Sydney: $94,391 per year

  • Brisbane: $92,011 per year

  • Perth: $84,366 per year

  • Sydney Central Business District: $80,759 per year

  • Gold Coast: $79,450 per year

  • Rhodes: $78,328 per year

  • Parramatta: $76,329 per year

 

 

9. Is Becoming A Mortgage Broker A Good Career?

 

When deciding whether a career as a Mortgage Broker is worth pursuing, it is essential to look at its pros and cons.

 

 

Pros

 

  • You can choose your working hours, especially if you run your broking business.

  • You can use your knowledge to help people make one of their life's most significant financial decisions.

  • You can make a good living from your work. If you run a mortgage broking business, you can have a higher earning potential than salaried ones.

  • You enjoy greater autonomy regarding the workplace and the way to do things.

  • It is more exciting work than routine employment where you meet many people.

  • You will use your multiple skills, such as sales, analytics, and customer service, to solve several issues.

  • You can learn many things, from rules and laws to new loan products and features. 

 

 

Cons

 

  • Starting a mortgage broking business involves years of hard work, like any business. You need to invest a lot of time and effort to build your client base and a referral network for clients.

  • Your income may be dependent on the broader economy and mortgage market. 

  • As Mortgage broking is heavily regulated, you must adhere to many rules and regulations while doing the job.

  • You could feel stress and frustration while dealing with banks and other financial lending institutions.

 

 

 

10. Frequently Asked Questions (FAQs)

 

 

What Percentage Do Most Brokers Take?

 

Many mortgage brokers in Australia earn commissions from lenders for loans that they settle. The broker's franchisor/aggregator generally disburses this payment.

 

There are three main types of commission:

 

 

Up-Front Commission

 

You earn this commission when you secure a new client for the lending institution and settle a home loan. You get it in the month after the successful loan settlement.

 

Based on some significant banks, upfront commission rates vary between 0.50% (+GST) and 0.7% (+GST).

 

 

Trail Commission

 

You earn this commission based on the loan balance on the timely loan payment. The lender pays you as a customer service cost when you retain the client in the business. 

 

The trial commission you will receive is determined based on the borrower's daily loan balance, considering the existing revenue margin incorporated into the loan. This commission is paid out monthly, reflecting the calculated loan balance.

 

The trial commissions reduce with time (by 1.5% per month) as customers make timely payments of their loans or pay them off completely.

 

The trial usually varies from 0% to 0.35% + GST. It is an average of 0.15% + GST p.a. and paid monthly to the mortgage broker.

 

 

Bonus Commissions

 

It is the upfront aggregator bonus commission you get from lenders based on the quality of their submitted home loan applications.

 

Suppose you submit a loan application without mistakes or rework, as per the lending policies, and it gets approved. In that case, the broker gets the bonus commission based on the proportion of applications submitted and the submission quality after the aggregator's cut.

 

Example of bonus commission based on the ratio of your applications that are correctly submitted:

 

  • Below 80% (correct submission of application): no bonus

  • Between 80% and 90%: 0.0275

  • 90% or above: 0.055%

 

 

Is a Broker a Stressful Job?

 

Working as a mortgage broker in Australia can be stressful due to the following reasons:

 

  • In the initial few months to years of your career, you may require working long hours to build your market presence, commission levels, and relationships with the banks and other lending agencies. 

  • It takes between 5 and 10 years to be a successful mortgage broker.

  • As you deal with huge loans, the job often involves a lot of stakes and becomes the cause of stress. 

  • Dealing with red tape at banks and other lenders can also be tiring and frustrating.

 

 

Do you Need a License To Be a Mortgage Broker in Australia?

 

Yes. Aspiring mortgage brokers must apply for an Australian Credit Licence through the Australian Securities and Investments Commission (ASIC).

 

They must also join a professional association such as the FBAA or MFAA to find mentorship opportunities with a practising Mortgage Broker.

 

 

Are Mortgage Brokers in Demand in Australia?

 

Yes. The demand for licenced mortgage brokers is expected to rise as most homebuyers prefer having professional assistance when searching for a dream home, relocating, or finding rental properties as a secondary income source.

 

 

Do Mortgage Brokers Get Paid by Banks?

 

Yes. Mortgage brokers do not charge their borrower clients for their services as they get paid a commission from lenders on every property mortgage they secure.

 

It allows them to focus on their client's best interests and ensure they provide the most appropriate mortgage for each client's circumstances.

 

 

How Long Does It Take To Become A Mortgage Broker?

 

Both Cert IV and Diploma-level mortgage broker courses are self-paced and online.

 

Completing Certificate IV in Finance and Mortgage Broking course assessments takes up to four weeks.
 

For the Diploma of Finance and Mortgage Broking Management course, it usually takes four to six weeks to complete the assessments.

 

Some training institutes also provide a 2 to 4 days workshop that can help fast-track your process of becoming a mortgage broker. Taking this path, students can get a certificate issued within a week.

 

It is worth noting that completing a mortgage broker course is the start of your professional journey. You must gain experience working in the industry before achieving financial success.

 

 

How To Become a Mortgage Broker in NSW?

 

TAFE NSW offers a free mortgage broker course, i.e., Certificate IV in Finance and Mortgage Broking, to eligible students. You can complete this 6-month course in virtual classroom off-campus or on-campus modes.

 

Walker & Miller Training Services is another reputable training institute offering Mortgage broker Certificate IV and Diploma courses to start as a Mortgage Broker in NSW, Australia.

 

  • Certificate IV in Finance and Mortgage Broking

  • Diploma of Finance and Mortgage Broking Management

 

The courses are held monthly in Sydney, Brisbane, Melbourne, and other cities. You can also complete them via distance learning. So, if you want to become a mortgage broker, consider completing these courses at the training institute.

 

It will help you gain accreditation with the MFAA, FBAA, and major lending institutions in Australia and comply with ASIC's education requirements.

 

Whether you are new to the mortgage broking industry or want to become compliant under the MFAA/FBAA and ASIC guidelines, these courses will help you gain solid foundations in the mortgage industry and start working in the minimum possible time.

 

 

How Do Mortgage Brokers Make Money in Australia?

 

Mortgage brokers receive compensation through different methods, including:

 

  • Employment with lenders, where they receive a fixed salary along with a variable bonus structure.

  • Working for finance and mortgage broking practices/licensees, where their earnings solely depend on commissions from successfully settled loan transactions.

 

When it comes to maximising revenue, the primary driver is referral business. This is followed by referrals received from trusted partners such as conveyancers, accountants, and real estate agents.

 

 

Do Mortgage Brokers Make Much Money?

 

As mortgage brokers offer specialised skillsets more than simple product knowledge, they are compensated well for their efforts.

 

From understanding clients' needs, risks, and goals to identifying the suitable mortgage product to preparing documentation and settling the loan process, mortgage brokers provide all-inclusive services to their clients.

 

A good mortgage broker can earn over $2,200 weekly in upfront remuneration.

 

As per the Australian Bureau of Statistics, this salary figure is more than the national weekly average for full-time income, i.e., $1,769. Practice owners or senior practitioners can expect to earn a lot more than this in Australia.

 

Despite the incentives, there are also associated costs with mortgage broking, such as:

 

  • Your annual earnings are limited by the monthly loan volume you settle.

  • Expenses incurred in getting a credit license, certification, and other education and training requirements

  • Aggregator fees (it can majorly impact your commission structure and costs) 

  • Set up costs to meet regulatory requirements.

  • Operational and technical expenses like renting business premises, IT costs, etc. 

  • Other ongoing costs around business operations.

 

Usually, it takes up to 2 years for a mortgage broker to earn a healthy pay packet in Australia.

 

 

How to Become a Finance Broker in Australia?

 

Here are the general steps to becoming a finance broker in Australia:

 

  1. Complete your Year 12 or an Australian high school equivalent course

  2. Undertake a qualification relevant to a finance broker, such as a Certificate IV in Finance and Mortgage Broking, a Diploma of Finance and Mortgage Broking Management, or a Bachelor of Business (Financial Planning). Completing these qualifications can take one to four years of full-time study.

  3. Apply for a credit or an Australian financial services licence via the Australian Securities and Investments Commission (ASIC). Obtaining a licence is a long process and may require consent to mortgage brokers' licence checks, such as bankruptcy and criminal history checks.

  4. Join a professional industry association like MFAA or FBAA to advance your career prospects and build a broader client base.

 

 

11. Conclusion

 

Now that you have learned how to become a mortgage broker in Australia, you are ready to discover this exciting career and build the life you desire.

 

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