Buying guide

Mortgage Brokers vs Banks: What’s Best for You?

The pros and cons of working with a mortgage broker vs a bank

By Karina Reardon (Head of Strategic Partnerships)

Last updated: 23 April 2025 | 3 min read

In New Zealand, around 60% of home loan borrowers use mortgage brokers, while the remaining 40% go directly to their bank, according to CoreLogic. So, why choose one over the other? And what does a mortgage broker do, exactly?

Let’s break it down — the pros, the cons, and what mortgage broker fees and costs you can expect.

What we’ll cover:

Getting a mortgage through your bank
Is it worth using a mortgage broker?
Tips for getting the most out of a mortgage broker

Getting a mortgage through your bank

Pros:

You might already have an established relationship with your bank.
There’s no need to move your everyday banking or accounts.
Some banks offer mobile mortgage managers or home loan coaches to guide you through the process.
Your bank already knows your financial history, which can speed things up.
Banks may throw in extras like insurance discounts, waived fees, cashback offers, or first home buyer perks.
If you’re already a valued customer (especially a business customer), your bank might be motivated to offer a better deal.

Cons:

If your bank turns you down, you’ll have to approach other lenders on your own — something a mortgage broker usually does for free.
Banks can be more cautious, especially with borrowers who are self-employed or have unique financial situations.

💡 Bonus tip: Not all banks work with mortgage brokers. If you’ve got your heart set on a specific bank, check whether they accept broker applications before diving in.

Is it worth getting a mortgage broker?

In short: yes, for many Kiwis it is. Mortgage brokers act as intermediaries, helping you find the right lender and navigate the home loan process. And the best part? The cost of a mortgage broker is usually zero — they’re typically paid by the lender, not by you.

What does a mortgage broker do?

Helps you get pre-approval by reviewing your income, expenses, savings, debt, and overall financial situation.
Works with multiple lenders to shop around for the best home loan deals.
Helps structure your loan and advise on repayments and re-fixing.
Assists with KiwiSaver withdrawals, First Home Loans, and other support available to first home buyers.
Knows which lenders are best suited for specific borrowers — for example, those who are self-employed or have complex finances.
Connects you with trusted lawyers, financial advisers, and insurance experts if needed.

Pros:

Usually free for you (the mortgage broker fee is paid by the lender).
Saves you time and legwork.
Can help you access lenders or deals that aren’t available directly to the public.
Offers personalised advice and loan structuring.

Cons:

Brokers earn commission, so they might have a preference for certain lenders.
Not all banks work with mortgage brokers.
Quality can vary — it’s important to choose someone reputable and experienced.

Tips for Getting the Most Out of a Mortgage Broker

Before you commit, the Financial Markets Authority (FMA) recommends asking your broker a few important questions:

Do you offer home loans from a range of different lenders?
How are you paid for your advice?
Does your payment differ depending on the lender?
Why are you recommending this particular loan?
What fees will I have to pay for this loan?

💬 Pro tip: You can tell your broker if you prefer to stay with your existing bank. They’ll still compare other lenders for you, so you can be confident you’re not missing out on a better deal.

Learn more about working with a mortgage broker in New Zealand.

*We hope this article has provided some helpful information. It's based on our experience and is not intended as a complete guide. Of course, it doesn’t consider your individual needs or situation. If you're thinking about buying or selling a property, you should always get specific advice.

Author

Karina Reardon

Karina is a seasoned mortgage expert with over 20 years of experience in New Zealand’s home loan and mortgage broker industry. A trusted voice in the sector, she regularly shares insights on mortgage trends, interest rates, and home loan advice. Her weekly commentary is distributed across a national network of financial advisers via social media and digital platforms. Recognised for her leadership and expertise, Karina was named one of the Elite Women in Mortgages 2023 and continues to be a go-to source for informed, practical mortgage guidance.

Visit: mortgages.co.nz