Mortgage broker best interests duty
Brokers must act in the consumer's best interests when providing credit assistance.
Who must comply
Mortgage brokers and brokerage businesses.
What triggers it
Providing credit assistance for a credit contract or related insurance.
When due
Each consumer interaction.
Evidence required
Documented loan comparison, recommendation rationale, file notes addressing consumer's objectives and circumstances.
Max penalty
Civil penalties up to $16.5M / 3× benefit / 10% turnover (corporations); consumer remedies
Summary
Section 158LA of the NCCP Act imposes a best interests duty on mortgage brokers. Brokers must act in the consumer's best interests and prioritise the consumer's interests if there is a conflict. ASIC's RG 273 gives guidance — conduct an appropriate range of comparisons, document the reasons for the recommendation, and price-prefer the consumer unless clearly outweighed by other factors.
Enforced by
Source legislation
Industries
Topics
Related obligations
- CWLTHComply with NCCP responsible lending obligationsCredit licensees must not enter into credit contracts unsuitable for the consumer.
- CWLTHBNPL providers — credit licensing from 10 June 2025BNPL captured by the NCCP Act as a regulated credit product from 10 June 2025.
- CWLTHConsumer Credit Hardship Notice (NCC ss 72-73)Credit providers must respond to hardship notice + assess variation request.
- CWLTHSmall Amount Credit Contract + Consumer Lease caps (post-SACC reforms)SACC + consumer lease fee caps + responsible lending tightened post-Royal Commission.
- CWLTHRespond to hardship notices within statutory timeframeCredit providers must consider hardship notices within 21 days under s 72 NCC.
- CWLTHDisplay comparison rate on credit product advertisingAnnual percentage + comparison rate must accompany credit product ads under NCCP Regulations.
Frequently asked questions
- Who must comply with Mortgage broker best interests duty?
- Mortgage brokers and brokerage businesses.
- What triggers Mortgage broker best interests duty?
- Providing credit assistance for a credit contract or related insurance.
- When is Mortgage broker best interests duty due?
- Each consumer interaction.
- What is the maximum penalty for Mortgage broker best interests duty?
- Civil penalties up to $16.5M / 3× benefit / 10% turnover (corporations); consumer remedies
- What evidence is required for Mortgage broker best interests duty?
- Documented loan comparison, recommendation rationale, file notes addressing consumer's objectives and circumstances.
Source: https://asic.gov.au/regulatory-resources/credit/mortgage-brokers/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.