Generally, a mortgage broker gets paid in two ways – an upfront fee and a trail fee. Across the board the payments from most lenders do not vary much so there should be no bias in the lenders that a broker chooses to discuss with you.
The upfront is paid by the lender for the introduction of your business. This fee replaces many of the costs a lender would have otherwise incurred in winning your business – staff wages, branches, advertising, electricity, telephones, superannuation – all those types of expenses.
The trail is paid each month based on the balance outstanding each month for the life of the loan. Many people ask why trail commissions exist and that is a fair question – the commission is paid to the broker so he or she can continue to provide you with assistance and support over the course of your loan. Simply speaking, if you have a problem with your loan, go back and talk to your broker and ask them to assist you, because they are being paid to look after you.