Broker Review Puts Loan Recommendations Under Fresh Scrutiny

Released on 13 October 2026, ASIC Report 840 examined 13 credit licensees across eight large mortgage broker aggregator groups. ASIC said the review covered groups responsible for about two-thirds of mortgage broker representatives in Australia, using data from 1 April 2023 to 31 March 2025. The regulator found that broker practices generally aligned with its guidance, but also identified gaps in recommendation practices, supervision and complaints handling.

The most attention-grabbing finding was that seven of the eight aggregator groups reported brokers did not recommend the cheapest loan option in more than 20 per cent of cases. That does not automatically mean the recommendation was poor. A higher-cost loan may have features, turnaround times, policy settings or flexibility that matter to a borrower. The issue ASIC raised was evidence: where a cheaper alternative exists, the file should clearly show why a more expensive option delivers value in the customer’s circumstances.

For Australians who are comparing credit while dealing with imperfect credit history, irregular income or self-employment, the message is particularly relevant. Search terms such as no credit check loans, instant approval loans for bad credit and guaranteed approval loans can create the impression that speed or access is the main factor. In reality, responsible borrowing decisions still turn on cost, affordability, fees, repayment timing, default consequences and the type of assessment a lender or broker undertakes.

The review also reinforces an important distinction. The mortgage broker best interests duty applies in the home loan broking context; it should not be assumed that every credit intermediary, introducer or lender operates under the same obligations. Consumers can benefit from understanding how brokers work, what panel of lenders they consider, how they are paid, and what evidence supports any recommendation or referral.

ASIC also found that complaints about best interests duty issues took longer to resolve than other complaints, with some complaints missed, delayed or withdrawn without full investigation. That matters because a borrower may only identify a problem after settlement, approval or a rejected refinance. Keeping copies of recommendations, comparison notes and repayment estimates can make later questions easier to raise.

The broader takeaway is not that the cheapest loan is always the right loan. It is that higher cost needs a clear reason. Before relying on any loan suggestion, borrowers may wish to compare the total repayment amount, establishment and ongoing fees, flexibility, security required, repayment frequency and consequences if income drops. General estimation tools such as a Personal Loan Repayment Calculator can help test assumptions, but calculator results are only estimates and are not approvals, quotes or personalised advice.