What a mortgage adviser actually does
An adviser compares your situation against a panel of lenders rather than just one bank's policy, works out roughly what you could borrow before you apply anywhere, and structures the loan itself, covering things like split rates, offset and the term, around how you actually want to repay it.
From there they handle the application and all the supporting documents involved, negotiate the rate and any cashback on your behalf, and are generally the ones who flag it a couple of years later when refinancing or refixing would save you money.
What it costs you
In most standard residential lending, you don't pay the adviser directly. The lender pays them a commission once your loan settles, typically somewhere between 0.5% and 0.85% of the loan amount, sometimes with a smaller ongoing trail fee for as long as the loan stays with that bank.
That's the usual structure, not a guarantee for every situation. Ask upfront whether any fee could ever fall to you, and a properly licensed adviser has to tell you anyway.
Adviser versus going straight to your bank
Your own bank can only ever assess you against its own policy and offer its own rates. An adviser works across several banks' policies at once, which matters more than it sounds. One lender's servicing calculator or stance on your situation can differ noticeably from another's.
Advisers don't generally access secret rates the public can't see. The published rates are the published rates. The value is in knowing which lender is more likely to say yes to your specific situation, and in negotiating a discount off that rate using the volume of business they place.
When a first home buyer gets the most value from one
A few situations come up often enough for first home buyers that an adviser's time usually pays for itself.
- Working out eligibility for a low deposit scheme such as a Kāinga Ora First Home Loan. The rules are specific, and getting them wrong wastes an application.
- Buying with less than a 20% deposit generally, where fewer lenders are an option and the conditions attached vary between them.
- Self employed or contractor income, which banks assess very differently from a salary.
- A previous application that was declined. An adviser can usually tell you why, and which lender would look at it differently.
- Progress payment lending for a new build, which has its own staged drawdown structure most first time borrowers haven't seen before.
When you probably don't need one
If your income is straightforward, you have no debt worth mentioning, and your own bank has already given you a competitive offer, an adviser may add little beyond convenience. The same goes for simply refixing an existing loan with the bank you're already with. That's usually a direct conversation.
How to choose one
Mortgage advisers in New Zealand have been licensed Financial Advice Providers since March 2021 and are required to give you a written disclosure covering their fees, which lenders they deal with, and any conflicts of interest. Ask for it, and check how wide their lender panel actually is before you commit to one.
Where to from here
Either way, it helps to know your own numbers before that conversation starts. Run your income, deposit and commitments through the calculator first, then take the result to an adviser to turn into a conditional loan approval.