What ASIC's Broker Review Actually Found, and What It Means for You

If you follow finance news even loosely, you may have seen headlines this week about a new regulator report questioning whether mortgage brokers always recommend the cheapest loan. It is a fair thing to wonder about, especially if you are weighing up whether to use a broker at all. So it is worth looking at what the report actually says, rather than just the headline version of it.

What the review actually covered

The Australian Securities and Investments Commission released the findings of a review into mortgage broker recommendations this week. ASIC looked at eight of the larger aggregator groups that brokers operate under, including names such as AFG, Connective, Finsure, the Lendi Group, Loan Market, Mortgage Choice, Outsource Financial and Yellow Brick Road. Across those groups, ASIC examined around 1,600 loan recommendations that it had deliberately selected rather than pulled at random, so the results are not meant to be read as a statistic that applies evenly across the whole industry.

What ASIC found

In seven of the eight groups reviewed, brokers recommended something other than the cheapest loan on the shortlist in more than one in five cases. In a handful of the costliest examples, the loan recommended was projected to cost the borrower more than twenty thousand dollars extra over five years, and ASIC said the explanation on file for some of those recommendations was not strong enough to justify the gap. The report also flagged some housekeeping issues behind the scenes, such as two groups that could not easily pull a clean cost comparison from their own systems and had to check files by hand, and a couple of instances where brokers were given advance notice of an upcoming compliance audit.

ASIC Commissioner Alan Kirkland put the standard plainly: where a broker recommends a loan that costs more than the available alternative, the client should be able to understand what they are getting for that extra cost, and the bigger the price gap, the stronger that explanation needs to be.

Why cheapest is not always the same as best

None of this means a broker recommending a different loan is doing something wrong. A genuinely lower rate is not much use if it comes without an offset account you actually need, if the lender takes far longer to approve finance when you are up against a contract deadline, or if it does not suit the kind of security or structure your situation calls for. The Mortgage and Finance Association of Australia made a similar point in response to the report, arguing that the cheapest option on paper and the right option for a particular client are not always the same thing. What the report is really asking for is better documentation of that reasoning, not a blanket rule that the cheapest rate always wins.

That said, the gap ASIC found is worth taking seriously, and it is a reasonable prompt for anyone with an existing loan, or anyone about to take one out, to ask a few direct questions.

What this means if you are working with a broker

You are entitled to ask your broker why they have recommended a particular loan over a cheaper one on the shortlist, and a good broker should be able to answer that in plain terms, covering things like features, service levels from that lender, or your own stated preferences. You are also entitled to see the comparison itself, not just the recommendation at the end of it. If a broker cannot explain the gap between the loan they have suggested and a cheaper alternative, that is a fair reason to ask more questions before signing anything.

At Claremont, this is part of why we talk clients through the comparison itself rather than presenting a single recommendation and asking for trust on faith. If a loan we suggest is not the cheapest one on your shortlist, we want you to understand exactly why, in terms that make sense for your own numbers and your own plans, not ours.

If you already have a loan through a broker and are not sure whether it is still the right fit, or if you are about to start the process and want to understand how a recommendation gets made, that is exactly the kind of conversation worth having before you commit to anything.

Figures note: data in this article comes from ASIC Report 840 and the accompanying media release, published 12 to 13 October 2026, with additional context from industry reporting on the same report. Dollar and percentage figures reflect ASIC's own stated findings from its reviewed sample and should not be read as representative of the entire broking industry.

This article is general information only and does not take into account your personal objectives, financial situation or needs. Please speak with a Claremont Financial broker before making any borrowing decision.