Best Interests Duty

Plain-English definition. The best interests duty requires a mortgage broker to act in the consumer's best interests when providing credit assistance. If the consumer's interests conflict with the broker's interests, the consumer's interests must take priority.

How it works in Australia. The duty applies to mortgage brokers and relevant credit licensees under the National Consumer Credit Protection Act. It does not require one automatic answer for every borrower. The broker should make reasonable inquiries about the consumer's requirements and objectives, compare relevant options available through the broker and explain why the recommendation is appropriate. Price matters, along with fees, loan features, restrictions and the consumer's stated needs.

ASIC said on 22 July 2026 that it is reviewing mortgage broker compliance with the duty. The review is expected to finish later in 2026, but ASIC had not released findings when this entry was updated.

Practical example. A broker recommends a loan with a 6.20% rate and a full offset account instead of a 6.10% basic loan. The higher-rate loan is not automatically in or out of the consumer's best interests. The written reasons should explain why the offset feature matters for that consumer, what it costs and which lower-cost alternatives were considered. The consumer can use the Loan Comparison Calculator and Offset Account Break-Even Calculator to test the arithmetic, but those tools cannot decide whether the legal duty was met.

What to ask. Ask which lenders are on the broker's panel, which products were compared, why the selected loan fits the stated needs, how the broker is paid and whether a lower-cost suitable option exists. Moneysmart says a broker should present more than one option and explain how each works and what it costs.

Common confusion. The duty is not a guarantee of approval, the lowest rate, the cheapest outcome or a particular lender. It also does not turn an online calculator into credit advice or a legal compliance assessment.

Sources. ASIC's July 2026 speech on the current review and ASIC Moneysmart's mortgage broker guide, checked 24 July 2026.

This entry is general information only. It is not credit advice, legal advice, a broker recommendation or a finding about compliance.

Last updated: 24 July 2026.