Best Interests Duty (BID) and Why It Matters for Your Mortgage Application
Best Interests Duty means mortgage brokers must put your needs before everything else.
It may sound like a load of financial jargon, but Best Interests Duty is something you should know about before you start your home loan application journey.
When applying for a home loan, choosing the right loan and lender can feel overwhelming. With so much choice, should you choose a big bank or a smaller lender? How do you know you’re getting the right deal for you? Where can you find the right help to navigate it all?
This is where Best Interests Duty (BID) comes in—a key Australian consumer protection that ensures mortgage brokers act in your best interests, rather than prioritising lender profits or commissions.
What is Best Interests Duty?
Introduced in 2021, BID is a legal obligation that requires mortgage brokers to recommend home loan options that best suit your financial circumstances and goals. This means that when you use a broker to apply for a home loan, you get:
Tailored Advice – a broker must assess your needs and suggest a loan that meets those needs, not the lender’s.
Transparency – a broker must disclose why a particular loan is recommended.
No Conflicts of Interest – Unlike bank staff, brokers must consider a range of lenders, not just one bank’s home loans.
Bank or Broker? How This Should Influence Your Mortgage Decision?
Unlike brokers, banks are not bound by Best Interests Duty. When you go directly to a bank, their loan officers can only offer the bank’s own products, which means their recommendations are limited to what their bank can provide. This limited range of loan products may not necessarily include a loan that’s best for your specific needs.
This is why working with a mortgage broker can be beneficial, as they compare multiple lenders and must prioritise your specific financial needs and goals.
Why HoLo?
Whether you're buying or refinancing, understanding Best Interests Duty helps you make informed choices with confidence. HoLo takes this further than other mortgage brokers. For HoLo, BID is more than a regulation; it’s a moral obligation.
Are you looking for a mortgage broker that takes trust to the next level? Create an account to see the range of great loans available today or book a free chat with a broker below.
If you’d like to know more, book an appointment below or contact us.
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