Should I Go Direct to a Bank or Use a Broker as a First-Home Buyer in Victoria?
By Lowest Interest Rates Australia
Introduction
When I first started looking for my dream home in Melbourne, I made a classic rookie mistake — I walked straight into my local bank and said, “Hi! I want a home loan!” The banker smiled politely, handed me a stack of paperwork, and started throwing terms at me like “LVR,” “LMI,” and “comparison rate.” By the time I left, I was more confused than when I walked in.
A few weeks later, a friend suggested I talk to a mortgage broker. I figured, “Why not?” One coffee meeting later, I realised I’d just met someone who not only spoke fluent finance but could also translate it into plain English — and help me compare dozens of lenders instead of just one.
If you’re a first-home buyer in Victoria wondering whether to go directly to a bank or work with a broker, you’re not alone. Both paths have pros and cons, but choosing wisely can save you thousands — and a whole lot of stress. So, let’s break it all down in plain language and figure out which one’s the better fit for you.
Table of Contents
- Bank vs Broker — What’s the Difference?
- Why Mortgage Brokers Have Become So Popular
- Pros of Using a Mortgage Broker
- Cons of Using a Mortgage Broker
- Pros of Going Direct to a Bank
- Cons of Going Direct to a Bank
- Detailed Comparison: Broker vs Bank in Victoria
- Why Brokers Are Especially Helpful for First-Home Buyers
- Real-Life Example: The Broker Advantage
- Final Thoughts — Get Expert Help from Lowest Interest Rates
Bank vs Broker — What’s the Difference?
Let’s start with the basics. A bank can only offer its own home loan products. When you walk into, say, ANZ or NAB, the loans they show you are limited to what they offer internally. It’s like walking into a single restaurant — you can only order off that one menu.
A mortgage broker, on the other hand, is like a food court — but for home loans. They have access to multiple lenders (often 20 to 40 or more) and can compare hundreds of loan products to find the one that best fits your needs, income, and goals.
Brokers act as a go-between for you and the lender. They do the research, prepare your application, submit it, and guide you through to settlement — usually at no cost to you, since they’re paid by the lender once your loan is approved.
Why Mortgage Brokers Have Become So Popular
Mortgage brokers now write more than 70% of all new home loans in Australia — and that number keeps growing. Why? Because people want choice, personal service, and transparency — things that can be hard to find in a traditional bank branch.
In Victoria, especially in Melbourne’s competitive housing market, first-home buyers rely on brokers to help navigate everything from government grants and stamp duty concessions to lender approvals and rate negotiations. Simply put, brokers level the playing field.
Pros of Using a Mortgage Broker
1. More Choice, Less Bias
Banks can only offer you their own loans. Brokers, however, have access to multiple lenders — from the Big Four to smaller credit unions and online banks — giving you a wider range of options. They’ll match you with the loan that best suits your goals, not just the one that makes them the most profit.
2. They Do the Hard Work
From comparing rates to submitting paperwork and chasing lenders, brokers do the heavy lifting. That means you can spend your time actually looking for your new home instead of drowning in spreadsheets and forms.
3. Tailored Advice for First-Home Buyers
Brokers are experts in helping first-home buyers take advantage of every available government scheme — like the First Home Guarantee, First Home Owner Grant, and Stamp Duty Concession in Victoria. They’ll help you combine these benefits strategically to save thousands.
4. Usually Free for You
Most mortgage brokers are paid by the lender once your loan is settled, meaning their service costs you nothing. Even better, a good broker will disclose exactly how they’re paid, so there are no hidden surprises.
5. Personalised, Ongoing Support
Unlike a bank, where you might get a new staff member every time you call, brokers build long-term relationships. They’ll check in regularly, review your loan over time, and help you refinance if better options arise later.
Cons of Using a Mortgage Broker
To be fair, brokers aren’t perfect either. Here are a few potential downsides to be aware of:
- Limited lender panel: Some brokers work with a specific set of lenders — so always ask how many are on their panel.
- Variable experience: Like any profession, some brokers are more skilled than others. Choose one who’s accredited, experienced, and licensed by ASIC.
- Possible small fees: While most brokers are free, a few might charge a minor service fee in special cases (like very small loans or niche lenders). They must disclose this upfront.
That said, the right broker can save you far more than any fee they might charge — often by securing better rates or avoiding costly lender conditions.
Pros of Going Direct to a Bank
For some buyers, especially those who already have a strong relationship with their bank, going direct might feel simpler. Here’s why:
- Familiarity: You may already have accounts, savings, or a credit card with the bank, making the process feel straightforward.
- Bundled benefits: Some banks offer package deals — for example, discounted insurance or fee waivers if you combine products.
- Streamlined communication: You deal directly with the decision-makers (though sometimes that means waiting longer for answers).
If you have a perfect credit score, a solid deposit (20%+), and a long-standing relationship with your bank, going direct might work fine. But for most first-home buyers, there’s a better path.
Cons of Going Direct to a Bank
While banks have their advantages, they also come with some major drawbacks — especially for first-home buyers in Victoria.
- Limited choice: You only see the bank’s own products, not competitors’ potentially better offers.
- Stricter approval criteria: Banks can be rigid about income type, employment status, or deposit size.
- No help with government schemes: Banks may not always guide you through programs like the First Home Guarantee or stamp duty concessions.
- Higher interest rates: Banks rely on loyalty — not necessarily competitiveness. You might miss out on better deals elsewhere.
- Less personalised service: With large institutions, you’re often just another application number.
Detailed Comparison: Broker vs Bank in Victoria
| Feature | Mortgage Broker | Direct Bank |
|---|---|---|
| Number of Lenders | 20–40+ lenders, wide choice | One (their own) |
| Cost to You | Usually free — paid by lender | Free, but fewer options |
| Access to Government Schemes | Helps you apply and qualify | Limited or no guidance |
| Interest Rates | Often lower, more competitive | May be higher than competitors |
| Paperwork & Guidance | Broker handles everything | You manage all documents yourself |
| Ongoing Support | Yes — broker reviews loan regularly | Minimal — you must initiate |
| Best For | First-home buyers, busy professionals, complex cases | Repeat borrowers with large deposits |
As you can see, brokers tend to come out ahead for most first-home buyers — especially when you need guidance, flexibility, and support throughout the process.
Why Brokers Are Especially Helpful for First-Home Buyers
Buying your first home in Victoria comes with unique challenges — deposits, stamp duty, and navigating government grants can be overwhelming. A broker simplifies this by:
- Helping you access First Home Owner Grants and Guarantee Schemes.
- Explaining Stamp Duty concessions and factoring them into your borrowing calculations.
- Comparing lenders that accept smaller deposits or special income types.
- Handling all the lender communication, so you don’t have to play phone tag.
In short, a broker doesn’t just find you a loan — they guide you through every step of the home-buying maze and help you feel confident in your decisions.
Real-Life Example: The Broker Advantage
Let’s look at an example. Liam and Sophie, a couple from Geelong, wanted to buy their first home for $680,000. They went to their bank first, but the bank said they needed a 20% deposit — over $130,000 — to avoid paying Lenders Mortgage Insurance (LMI).
Frustrated, they turned to a mortgage broker at Lowest Interest Rates. The broker analysed their situation and helped them access the First Home Guarantee, which allowed them to buy with just a 5% deposit and no LMI. The broker also found a lender offering a lower interest rate than their bank’s best offer.
Result: They bought their home six months earlier than planned, saved around $25,000 in LMI, and reduced their monthly repayments. Without a broker, they might still be renting.
Final Thoughts — Get Expert Help from Lowest Interest Rates
So, should you go direct to a bank or use a broker as a first-home buyer in Victoria? While banks can be convenient if you already have an existing relationship, a mortgage broker gives you more choice, more guidance, and more savings — all at no cost to you.
As a first-home buyer, having someone on your side who knows every lender’s quirks, every government incentive, and every hidden fee can make a world of difference. A broker’s job is to represent you — not the bank — and ensure you get the best deal possible.
The friendly team at Lowest Interest Rates specialises in helping Victorian first-home buyers navigate the complex world of loans, grants, and approvals. They’ll compare lenders, handle the paperwork, and find you the ideal home loan to make your property dream a reality.
Visit LowestInterestRates.com.au today to connect with an expert broker who’ll help you save time, stress, and money on your first home in Victoria.
