When it comes to getting a mortgage, most people default to their existing bank. It feels familiar, safer, and the assumption is that loyalty translates into a good deal. In some cases, that is true. In many, it is not. So, what is the difference? Understanding what mortgage advisers do, and how it differs from going direct to a bank, is worth knowing before you make one of the biggest financial decisions of your life.
What Happens When You Go Direct to a Bank
When you approach a bank directly, you are dealing with a lender who can only offer you their own products and lending specialists who are only familiar with that bank’s policies. Their job is to assess whether you qualify for a loan with them and, if so, to offer you their current rates and terms. They cannot tell you whether another lender might offer better terms, a higher borrowing amount, or a more suitable structure for your situation.
That does not mean going direct is the wrong approach. If your financial position is straightforward, your existing bank relationship is strong, and you understand how mortgages are structured, you may get a competitive outcome. But you will be making that assessment without the benefit of a broader market view.
What a Mortgage Adviser Does
A mortgage adviser is a licensed professional who assesses your financial position and then identifies, recommends, and arranges a mortgage from a panel of lenders. Rather than representing one bank, we typically work across multiple lenders, including the major banks, second-tier lenders, and specialist lenders, and we will recommend the option that best fits your needs. For more on what a mortgage adviser does, read my blog here.
Advisers are bound by the Financial Markets Conduct Act and must operate under a Financial Advice Provider (FAP) licence. We have a legal duty to act in your best interests, to disclose any conflicts of interest, and to provide advice that is appropriate to your circumstances.
In New Zealand, mortgage adviser services are typically free to the borrower. Advisers are compensated through a commission paid by the lender upon settlement. This commission structure is disclosed to you as part of the advice process.
Where an Adviser Adds the Most Value
For straightforward borrowers, stable employment, clean credit, and a standard deposit, both routes can produce a similar result. The difference tends to be most pronounced in more complex situations.
Self-employed borrowers often find that lenders assess their income differently, and an adviser with experience in this area can identify which lenders are more flexible in their approach. Buyers with a smaller deposit may find that some lenders have more appetite for their application than others. Buyers who have been declined by their bank may simply need their application structured differently or submitted to a lender whose credit appetite is a better fit.
We will also look at your full lending structure, the split between fixed and floating, the term, any offset or revolving credit components, rather than simply approving an amount or getting you the lowest rate. This structural advice is something a bank branch encounter does not always provide in depth, and may not be qualified to answer if your situation falls outside their policies.
Which Approach Is Right for You?
There is no right or wrong answer. But if you are a first-home buyer navigating the process for the first time, if you are self-employed or have variable income, if you have had a previous credit issue, or if you are simply unsure whether your bank is offering you the best available outcome, speaking with a mortgage adviser costs you nothing and gives you a broader perspective. To explore suburb-level data that supports your property search, visit nextmoveproperty.co.nz and check out our first-home buyer or investor reports