Why use a mortgage adviser in NZ? (and how they get paid).
Navigating the New Zealand property market can feel like a maze. From shifting interest rates to the ever-changing bank criteria, securing a home loan is a big job in itself. A mortgage adviser (formerly known as a mortgage broker in New Zealand) acts as your personal guide, helping you find the right loan without the heavy lifting.
The most common question we hear from first-home buyers is: "If I don’t pay for the service, how do you make money?".
How do mortgage advisers get paid in New Zealand?
The simple answer is that in the vast majority of cases, the lender pays us, not you. When you settle a loan through a mortgage adviser, the lender you choose pays a commission.
This is a great outcome for everyone involved:
- For you: You receive expert, personalised advice at no cost to you.
- For lenders: They gain new customers without high overhead costs.
- For the market: It encourages lenders to stay competitive with their rates and offers.
Are mortgage advisers really on your side?
Absolutely. Under the Financial Markets Conduct Act, mortgage advisers in New Zealand are legally bound by a duties framework. Most importantly, we are required to give priority to your interests above our own. Our reputation is built on your success. We don’t work for a specific bank; we work for you to find a competitive deal that fits your life goals.
A common myth is that you will get a higher interest rate if you use a mortgage adviser. The reality is that the rate offered through an adviser is typically the same as (or better than) what you would get walking into a bank branch. Because we have a bird ’s-eye view of the market, we can often negotiate rates or incentives you might miss on your own.
When might you incur a fee?
While our services for standard residential home loans are free for you, there are three specific scenarios where a fee might apply. We will always discuss these with you upfront:
- Refinancing Early: If you switch banks or repay your loan within a certain period (usually 24 to 27 months), the bank may "claw back" the commission paid to the adviser. We may charge a fee to cover the time spent on your application if this happens.
- Complex Lending: Property development, bridging finance, or complicated business structures require significantly more work and often don't follow standard commission structures.
- Non-Bank Lenders: Some private or specialised lenders don't pay commissions and may charge a separate setup fee instead.
The bottom line for home buyers
For the vast majority of Kiwis, working with a mortgage adviser can be a powerful resource that removes the stress of rate-shopping. Whether you’re in Auckland, Wellington or Christchurch, having a professional negotiate with a wide panel of lenders ensures you make a smart, informed financial decision.