What is an online mortgage broker?

An online mortgage broker assesses your financial priorities and overall financial situation to make a series of informed recommendations regarding which home loan products might suit you. They do everything a regular broker does – just online, which may make them easier to work with for some borrowers.

Just like a conventional mortgage broker, an online mortgage broker also acts as a kind of “project manager” for your home (or investment property) buying endeavours. They’ll oversee the loan application and homebuying process (or refinancing process) from pre-approval to settlement and handle all the necessary liaising with the lender, and can provide information on additional payments you might be eligible for like the First Home Owner Grant.

This liaising can involve negotiating more favourable interest rates, fees and conditions on your behalf, which is one of the primary advantages of working with a mortgage broker, online or otherwise – their product knowledge and the relationships they have with different lenders could land you a market-beating home loan.

They can also provide more information about home loans as a product and how they work, and explain concepts like lenders mortgage insurance (LMI), loan-to-value ratio (LVR) and how comparison rates work.

Online mortgage brokers are usually paid a commission by the lender for helping the customer successfully apply for a loan with them. Commission rates are typically calculated as a percentage of the settled loan amount and generally don’t vary too much from lender to lender.

The good news is that those lender-paid commissions save you having to directly pay the broker a single cent in most cases. However, some online mortgage brokers may still charge an upfront commission for their services, so be sure to check before committing!

When an online mortgage broker recommends a loan, they’re required to disclose an estimate of the commission they’ll receive from the lender for recommending that particular product – they’ll provide this estimate to you in writing before they submit your final application to the lender. Online mortgage brokers are also legally required to always act in your best interests, but you’ll likely still benefit from engaging fully with the process and overseeing the moves the broker is making on your behalf.

An online mortgage broker might be an option worth considering if you think you’ll need help choosing a home loan, but either don’t want to or can’t engage the services of a conventional in-person broker. An online mortgage broker can also be a useful option for time-poor people.

It’s important to note that this isn’t a ‘get help or go it alone’ decision. You’ll likely have to engage the services of a conveyancer and/or a solicitor during the home loan application process, so you’ll have plenty of help through the entire process regardless of whether you work with a mortgage broker, online or otherwise.

So, if you’re a first home buyer and you’ve never had a home loan before or don’t consider yourself a financial wiz, you may want to consider finding an online mortgage broker to work with to ensure you end up with a home loan that suits your needs. Whether you’re looking for a fixed rate, variable rate or split rate home loan, an online mortgage broker will be able to help.

They can also help you to decide what home loan options might be right for you, like maybe an offset account, redraw facility or the ability to make extra repayments

One drawback of working with a mortgage broker, online or not, is that they typically won’t be choosing their recommendations from a pool containing every single home loan available in the market.

Online mortgage brokers are governed by the same rules and regulations as conventional brokers, including the provisions of the National Consumer Credit Protection Act (2009). An online mortgage broker will have all the same qualifications and knowledge as an in-person mortgage broker – the only difference is how they do business.

When engaging with an online mortgage broker, though, be sure to do your research. Look for contact details on their website, including their credit licence details, and check to see if they have any social media pages or online reviews you can use to verify that everything’s above board.

There’s no right or wrong answer here, but your decision to work with either an in-person or online mortgage broker will typically be determined by how much spare time you have on your hands and where you live relative to mortgage brokers in your area.

Some prospective borrowers may find that they’re too time-poor to visit a broker in-person during business hours, or that there aren’t too many reputable mortgage brokers in their immediate vicinity. In these cases, an online mortgage broker may make for a suitable solution.

If you already know that the online approach is for you, and you have a good idea of which home loan you want, you may decide to apply directly through an online lender and not bother with a mortgage broker.

However, if you’re unsure or this is your first time going through the online home loan process, you may want to consider working with an online mortgage broker instead, so you have someone helping you every step of the way.

Additionally, if you’re refinancing with a focus on finding the most competitive rate possible, a mortgage broker could potentially help to shave a few basis points off your rate.

You can find an online mortgage broker in many of the same ways you’d find a conventional broker – you can do a Google search for reputable online brokers, or find one based on a recommendation from a friend or family member.

That being said, why bother with the hassle of looking high and low for an online mortgage broker yourself when our expert team of online mortgage brokers is but a few clicks away? They’re on-hand and available to help you find a good-value home loan – as well as answer any questions you may have about the home loan process!