Mortgage Broker Fees in NZ — Are They Really Free?

The Short Answer

For residential home loans in NZ, mortgage brokers like Finch typically charge you $0. The lender pays the broker a commission on settlement out of its distribution budget. That commission would otherwise stay with the bank if you walked in direct. It does not increase your interest rate, your loan fees, or your settlement costs. Commercial loans, complex specialist deals, and some non-bank scenarios may carry a disclosed broker fee — your broker is required to disclose this upfront in writing.

How NZ Mortgage Broker Commissions Work

The structure most main NZ banks use:

• Upfront commission — typically 0.55% to 0.85% of the loan amount, paid to the broker on settlement. On a $600,000 loan that's $3,300-$5,100.
• Trail commission — typically 0.15% to 0.20% per year of the outstanding loan balance, paid quarterly while the loan remains with the lender. On a $600,000 loan that's $900-$1,200/year.
• Clawback — if the loan discharges within 2-3 years, the broker repays a portion of the upfront commission back to the lender.

Who Pays for It in the End?

Banks build broker commission into their cost-of-acquisition budget — the same budget that funds branch staff salaries, marketing, and direct-to-consumer cashback campaigns. They don't recover the commission from your interest rate; the broker channel pricing is typically the same or sharper than the carded direct-to-consumer rate, because banks know broker-introduced borrowers are price-conscious. The broker's commission funds the broker's role in saving you the bank's customer-acquisition effort.

When NZ Brokers DO Charge a Fee

• Commercial property loans — typically 0.50%-1.00% of the loan, disclosed up front.
• Asset finance / equipment finance — some specialist scenarios carry a small broker fee.
• Highly complex specialist residential — extremely rare; disclosed before engagement.
• Bridging finance — sometimes a small fee applies to the bridging facility itself.

Any broker fee on a residential home loan must be disclosed in writing under the Financial Markets Conduct Act. Walk away from any broker who isn't transparent about how they're paid.

Conflict of Interest Disclosures

Under NZ regulation, brokers must disclose any conflict of interest before recommending a lender. The most common conflict to look for: brokers owned by a single bank (rare in NZ but exists). Independent brokers like Finch are not owned by any lender and our recommendations are not biased by ownership. Commission differences between lenders are also disclosed — and where two lenders offer similar value, the regulator expects the broker to recommend the one in your best interest, not the one paying highest commission.

Questions to Ask Before Signing Up With Any NZ Broker

1. Are you FSP-registered? (Verify on fsp-register.companiesoffice.govt.nz)
2. How many lenders are on your panel?
3. Who pays you, and at what rates?
4. Will you charge me directly for any reason?
5. Are you owned by or contracted to any single bank?
6. Can I see your written disclosure document?

Finch is FSP1011206 / FSPR FSP1011125, independent, with a 20+ lender panel, and charges $0 on residential home loans.