Emerging risks and ASIC's focus on mortgage brokers: What banks and mortgage aggregators need to know
11 February 2026
"Since July 2019, ASIC action against finance and mortgage brokers has resulted in 11 criminal convictions. A further 22 individuals or companies were removed from credit services. Seven individuals or companies were removed from financial services. And one individual was disqualified from managing corporations. This highlights the broad range of tools available for us to use in response to any misconduct we may uncover in the course of our review."
ASIC Commissioner Alan Kirkland at the 35th Annual Credit Law Conference
Key insights
- In 2026, ASIC's priorities continue to focus on credit, of which one of the focus areas relate to mortgage broker conduct.
- Home lending represents the largest area of consumer credit in Australia, with mortgage broking reflecting more than 75% of new residential mortgages, compared to bank proprietary lending.
- The key areas of ASIC's focus relate to mortgage brokers' compliance with best interest duty obligations, complaints handling and audit and compliance practices.
- Mortgage aggregators should ensure that their practices and brokers are complying with regulatory obligations, as well as mitigate emerging issues in 2026, to avoid poor consumer outcomes, regulatory investigation and enforcement.
- Banks with mortgage broking distributions should review their monitoring and supervision arrangements of mortgage aggregators and mortgages originated by mortgage brokers to mitigate key risks of regulatory non-compliance and prevent consumer harm.
Introduction
In 2026, ASIC's priorities continue to focus on credit, of which one of the focus areas relate to mortgage broker conduct. Mortgage aggregators and banks need to understand ASIC's focus areas, as well as emerging areas of risk and act now to avoid poor consumer outcomes, regulatory investigation and possible enforcement action.
We have outlined ASIC's focus areas, as well as emerging areas of risk relating to mortgage brokers. We have also outlined the considerations that mortgage aggregators and banks can do to mitigate risk of poor consumer outcomes or regulatory action.
Background to the mortgage broking landscape
Home lending represents the largest area of consumer credit in Australia, with mortgage broking reflecting more than 75% of new residential mortgages, compared to bank proprietary lending.
In recent times, the number of new residential mortgages has grown. This strong housing momentum reflects a resilient Australian economy, expanded policies such as the Australian Government 5% Deposit Scheme and overall, sound lending standards.
Mortgage broking continues to grow as the preferred channel for consumers to obtain residential mortgages. However, in response to this growth, regulators are keeping a close eye on macro and micro prudential factors. APRA, from 1 February 2026, has limited high debt-to-income home lending to pre-emptively contain a build-up of housing-related vulnerabilities in the financial system. Signalling a shift in the financial risk cycle and a potential build-up of vulnerabilities that could undermine banking sector and household financial resilience if left unchecked. ASIC, in its announcement of priorities relating to credit, will focus on mortgage broking practices.
ASIC focus areas, emerging areas of risk and considerations for mortgage aggregators and banks in 2026
ASIC's message is clear - While the sector attracts relatively few consumer complaints, ASIC are conscious that misconduct by brokers may not always be obvious to their customers. ASIC has stated that if they identify series issues, they will take appropriate action.
Mortgage aggregators and banks should take note of the considerations and regulatory risk areas below.
| Regulatory risks in 2026 | Why it matters | Considerations for mortgage aggregators and banks |
1. Broker compliance with best interests obligations The National Consumer Credit Protection Act 2009 (National Credit Act) requires mortgage brokers to act in the best interests of consumers when providing credit assistance. ASIC Regulatory Guide 273 Mortgage brokers: Best interests duty (RG 273) explains what ASIC looks for when they assess compliance with best interests obligations under the National Credit Act, as well as steps mortgage brokers and other relevant Australian credit licensees (ACL) can take to minimise the risk of non-compliance with these provisions. The requirements to act in a consumer’s best interests will depend on the individual consumer’s circumstances. However, mortgage brokers likely need to:
| Ensures compliance with best interests obligations under the National Credit Act as well as RG 273. | Mortgage aggregators should have adequate policies, systems, training and procedures in place to facilitate broker compliance with best interests obligations. Particularly paying attention to whether mortgage brokers suggest one or more options to the consumer and providing information as to why the recommended option(s) are in the consumer's best interests. Banks should have adequate oversight of their broker originated loans pre and post settlement, as well as oversight of their accredited brokers' ongoing compliance with best interests obligations. |
2. Broker complaints handling ASIC Regulatory Guide 271 Internal dispute resolution (RG 271) outlines what ACL's must do to have an internal dispute resolution (IDR) system in place that meets ASIC’s standards and requirements. ASIC expects brokers' to comply with their IDR obligations, particularly how brokers identify and respond to complaints that flag potential concerns about compliance with their best interests obligations. | Ensures compliance with RG 271, as well as early detection and response to emerging risks relating to best interests obligations. | Mortgage aggregators should have adequate policies, registers, training and procedures in place to facilitate:
Banks should have adequate oversight of mortgage aggregator complaints arrangements, as well as processes and controls to facilitate timely escalation of complaints relevant to lenders. For example, complaints relating to a lender's product, a lender's accredited broker or mortgage |
3. Audit and compliance practices ASIC outlined that it will review the audit and compliance practices of mortgage aggregators to understand how effectively they are supervising their mortgage broker representatives and ensuring they comply with their best interests duty. | Supporting detection of non-compliance with regulations and improvement opportunities for brokers to improve practices. | Mortgage aggregators should have adequate policies, audit and compliance practices in place to:
Banks should have adequate oversight of mortgage aggregator audit and compliance arrangements. Banks should also conduct its own audit and compliance practices of loans originated by their accredited brokers pre and post settlement. |
4. Scams Through the mortgage origination process, mortgage brokers manage sensitive financial and personal information shared by consumers, making them and consumers potential targets for scammers. The threat of scams means mortgage brokers need to know how to protect themselves, what they can do if they are targeted, and how to support consumers who are affected. | Protects mortgage brokers and consumers from scams. | Mortgage aggregators should have adequate policies and practices in place to support its mortgage brokers and consumers combat scam activity. Banks should consider how its scams, prevention framework initiatives cover its mortgage broker distribution channel to protect consumers from scams. |
5. Loan Application and Document Fraud In a highly competitive housing market, there have been increasing risks relating to loan application fraud. This includes instances of incorrect consumer income or financial positions, for example finance applications, and falsified income documentation. These 'liar loans' can be traced back to case studies outlined in the Hayne royal commission into misconduct in the banking, superannuation and financial services industry. | Early and accurate prevention and detection fraud promotes fair practices to comply with regulatory obligations. | Mortgage aggregators should have adequate policies and practices to prevent and detect loan application and document fraud risk in loans originated by their mortgage brokers. Banks should consider its approach to loan application and document fraud risk, this may include deploying technology and AI to scan documents and loans for indicators of fraud risk. |
6. Shadow broking In recent times, the risk of shadow broking has increased, corresponding to the increasing sophistication of broker business operating models and broker movements between businesses. This presents the risk that may result in unlicensed individuals providing credit assistance. | Upfront and ongoing monitoring to combat potential risks of unlicensed credit assistance being provided to consumers. | Mortgage aggregators should have in place policies and processes to monitor brokers and broker businesses, including whether there are any structural or related party changes to mitigate the risk of shadow broking. Banks should have adequate oversight of mortgage aggregator arrangements to mitigate the risk of shadow broking. |
What mortgage aggregators and banks need to do next
Mortgage aggregators and banks need to act now to avoid poor consumer outcomes, reputational damage, regulatory investigation and possible enforcement action.
Mortgage aggregators and banks should review their risk, compliance and monitoring practices to ensure they are complying with regulatory obligations and adopting industry better practices. By maintaining strong mortgage broking practices, this will improve the overall functioning of the mortgage broking market and protect consumers from harm.
