The mortgage broker best interests duty: what it actually requires

Since 1 January 2021, Part 3-5A of the National Consumer Credit Protection Act 2009 has required mortgage brokers to act in the best interests of the consumer when providing credit assistance (s 158LA and s 158LE), and to give priority to the consumer’s interests wherever a conflict exists (s 158LB and s 158LF) — alongside a ban on conflicted remuneration. ASIC’s Regulatory Guide 273 explains what it looks for: gathering information about the individual consumer, assessing a range of products with overall cost as a prioritised factor, presenting options with a recommendation and reasons, and keeping records that show how the broker complied.

Key points:
- The duty is **enacted law**, in force since **1 January 2021**: [s 158LA of the NCCP Act](https://www.legislation.gov.au/C2009A00134/2025-06-10/2025-06-10/text/original/pdf/1) requires a licensee to act in the best interests of the consumer in relation to the credit assistance, with s 158LE applying the same duty to credit representatives (civil penalty: 5,000 penalty units).
- Where a broker knows, or reasonably ought to know, of a conflict between the consumer’s interests and its own, an associate’s or a representative’s, the **conflict priority rule** in s 158LB / s 158LF requires the consumer’s interests to be given priority.
- There is **no safe harbour**: ASIC’s [RG 273](https://www.asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-273-mortgage-brokers-best-interests-duty/) states the obligations cannot be avoided by any notice or disclaimer, and a broker cannot comply merely by getting the consumer to consent to a conflict.
- RG 273 translates the duty into practice — gather information about the individual consumer, make an individual assessment across a reasonably representative lender panel with overall cost prioritised, generally present more than one option with a documented recommendation, and keep records. ASIC warns that non-compliance risk is “substantially increased” where processes produce a “one-size-fits-all” outcome.
- Lenders selling their own loans directly do **not** owe this statutory duty — it attaches to “mortgage brokers” as defined in s 15B. Responsible lending obligations apply to both channels; for brokers, the best interests duty sits *on top* of them.
- The duty coexists with commission. Conflicted remuneration is banned, but commissions that meet the conditions in the NCCP Regulations remain lawful — not volume- or campaign-based, and, where the drawdown cap applies, referenced to funds actually drawn down net of offset in the first year, with clawback limited to 2 years and never charged to the consumer.
- Disclosure is compulsory: a [Credit Guide](/credit-guide) under s 113 and a credit proposal disclosure document under s 121, which must include a reasonable estimate of the commission likely to be received for the specific loan.