A mortgage broker may have good reasons to recommend a more expensive loan. Australia’s corporate regulator says some brokers are failing to leave enough evidence of what those reasons are.
ASIC’s review, released on October 13, examined 13 credit licensees across eight large aggregator groups. Seven groups reported that brokers selected something other than the cheapest loan in more than one-fifth of cases. Extra features can justify a higher price, ASIC said, but it found recommendations whose supporting records did not clearly establish the benefit to the borrower.
The report identifies weaknesses in supervision and the handling of complaints about the legal duty to act in a customer’s best interests. Those complaints took longer to resolve than others; some were missed, delayed or withdrawn without a full investigation.
The groups reviewed account for about two-thirds of Australia’s mortgage-broker representatives. ASIC used data covering April 2023 to March 2025, rather than measuring recommendations made this month.
The findings call for better implementation of existing obligations. They do not establish that choosing a higher-cost loan necessarily breaches the law, or announce a new rule requiring brokers always to recommend the cheapest product.
