Mortgage broker VS big bank: Which is better for first home buyers?

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Which is the better option if you’re a first home buyer looking for a home loan in New Zealand – the big banks or mortgage brokers?

We may be slightly biased but after several decades in the financial industry, we’d say it’s almost always better to go with a good local mortgage broker that you can trust. That may be why mortgage brokers’ share of the home loan market in NZ has grown from 25% to over 40% in the last 16 years. 

What makes a good home loan service for a first home buyer?

Before we discuss whether banks or mortgage brokers offer a better service, we have to establish what you need as a first home buyer. 

For one, most people applying for a home loan for the first time need education so that they understand what they’re getting into. That means learning:

  • How much loan repayments will be and what proportion of your income will go towards them. 
  • What happens if interest rates increase.
  • The benefits and advantages of different loan features and structures.
  • What happens if you can’t make repayments. 
  • All the fees you’ll have to pay. 
  • What happens if you want to move or discharge your loan before your loan term is over. 
  • Whether the fixed or variable rate is better for you. 

The above points are just the start of what you’ll need to learn to truly understand your home loan and get the best out of it. Having an expert to run you through everything is extremely helpful at this stage. 

It’s also usually better to have access to several lenders and all their diverse financial products instead of just one. This gives you more flexibility so that you can adapt your loan to your unique circumstances. It will also increase your chances of getting your home loan approved because if one lender denies your application you can just move onto the next one. 

Last, of all, it’s very helpful to have an impartial expert assist you when completing your home loan application. They can help you gather all the documents you’ll need, like evidence of income, deposit, identity and your address. You may also need a hand making sure your application succeeds by paying off your loans, preparing a budget, checking and repairing your credit score and improving your savings.

Banks VS mortgage brokers: Who offers a better service for first home buyers?

To help you decide for yourself, we’ve taken a closer look at a few of the things you should be looking for when choosing who to apply with and compared mortgage brokers and banks.

Banks Mortgage brokers/advisors
Personalised advice Advisors at banks often offer good personalised advice but it may favour products that they sell. A good mortgage broker will offer 100% impartial personalised advice. 
Access to multiple lenders If you go to a bank, you’ll only have access to their products.  Go with a high-quality mortgage broker and you’ll have access to the products of several banks and lenders. This may mean a lower interest rate or a higher chance of your application being accepted. 
Home loan application Banks will usually help with your home loan application but they may stop short at helping you improve it with insider advice. Once they’ve denied your application, you may find yourself back at square one.  A good mortgage broker will help you with every aspect of your application. If it’s likely to be denied, they can help you improve the application and your financial situation to improve your chances.
Costs The applications and advice may be free, except for a small application fee. The services of mortgage brokers are usually completely free. Banks may charge application fees. 


We think it’s pretty clear that mortgage brokers generally provide a better, more personalised service for first home buyers than banks. That explains why their share of the market is growing so quickly. 

Are you keen to get your home loan application started on the right foot? Get in touch with the team of mortgage advisors here at Money Empire for free financial advice and expert help getting your application across the line. 

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