If you have ever shopped for a home loan, chances are you have heard a few strong opinions about using an intermediary. Some people swear by them, while others insist it is better to deal with banks directly. In the middle of all this noise sits a collection of myths that often discourage borrowers from even considering another option.
The truth is that many assumptions about working with a mortgage broker are outdated, oversimplified, or simply wrong. These misconceptions can lead borrowers to miss out on better loan structures, clearer advice, or long-term savings. In this article, we unpack the most common myths about using a mortgage broker and explain what actually happens behind the scenes, so you can decide based on facts rather than hearsay.
Myth 1: Using a Mortgage Broker Is More Expensive
One of the most persistent myths is that engaging a mortgage broker will cost you more than going directly to a bank. Many borrowers assume there are extra fees hidden somewhere, waiting to appear at the last minute.
In reality, in markets like Singapore, borrowers typically do not pay direct fees to a mortgage broker. Brokers are usually compensated by banks through commissions when a loan is successfully completed. This arrangement means the service is often provided at no upfront cost to the borrower.
More importantly, even when commissions exist, banks generally price loans consistently whether you apply directly or through an intermediary. The idea that using a broker automatically inflates your interest rate is largely a misconception.
Myth 2: Mortgage Brokers Only Push Loans That Pay Them More
Another common belief is that a mortgage broker will always recommend the loan that earns them the highest commission. This myth paints brokers as salespeople working against the borrower’s interests.
While brokers are paid commissions, their long-term success depends heavily on trust, referrals, and repeat clients. Recommending unsuitable loans may generate short-term income, but it damages credibility and reputation. In practice, reputable brokers focus on matching borrowers with loan structures that suit their financial profile and goals.
Regulatory frameworks and industry standards also require transparency. A professional broker’s role is to advise, not to push a single option blindly.
Myth 3: Going Direct to the Bank Gets You Better Rates
Many borrowers believe that cutting out the middleman guarantees better pricing. It feels intuitive, but it is not always accurate.
Banks generally offer the same headline rates whether you apply directly or through a mortgage broker. In some cases, brokers may even have access to promotional packages or negotiation leverage due to volume relationships with lenders. This can translate into better terms or more flexible structures.
The key point is that rates are not automatically better just because you walk into a bank branch yourself. Comparing options across multiple banks remains essential, regardless of how you apply.
Myth 4: Mortgage Brokers Are Only Useful for Complicated Cases
Some people think a mortgage broker is only needed if your situation is unusual, such as being self-employed or having complex income streams. If your case seems straightforward, you might assume a broker adds no value.
In reality, even straightforward cases benefit from comparison and structure optimisation. A broker can help you understand differences between fixed and floating packages, lock-in periods, repricing options, and long-term cost implications. These factors matter regardless of how simple your income profile appears.
Complex cases may highlight a broker’s value more clearly, but simple cases still gain from informed comparison.
Myth 5: Mortgage Brokers Slow Down the Process
Another myth is that adding an intermediary introduces delays and paperwork, making the loan process slower. Some borrowers worry that communication will become fragmented or inefficient.
In practice, a good mortgage broker often streamlines the process. Brokers know exactly what documentation banks require and how to prepare submissions correctly the first time. This reduces back-and-forth requests and unnecessary delays.
Instead of juggling multiple bank conversations yourself, you work with one point of contact who coordinates everything. For many borrowers, this actually speeds things up.
Myth 6: All Mortgage Brokers Are the Same
It is easy to lump all brokers into one category, but this myth overlooks important differences. Just like any profession, quality varies.
Some brokers focus on education and long-term planning, while others operate more transactionally. Some specialise in refinancing, while others work primarily with first-time buyers or investors. Treating all brokers as identical leads to poor decisions.
The takeaway is not to avoid brokers altogether, but to choose one carefully based on experience, transparency, and communication style.
Myth 7: Mortgage Brokers Replace Your Own Responsibility
A subtle but damaging myth is the idea that working with a mortgage broker means you no longer need to understand your loan. Some borrowers assume the broker will handle everything and that there is no need to ask questions.
A broker provides guidance, comparison, and clarity, but the final decision still belongs to the borrower. Understanding interest structures, penalties, and long-term obligations remains essential. A good broker encourages questions rather than discouraging them.
The relationship works best when the borrower stays engaged and informed, not passive.
Myth 8: Mortgage Brokers Are Only About Getting the Lowest Rate
Interest rates matter, but they are not the whole story. Many people assume the sole purpose of a mortgage broker is to hunt for the lowest number available.
In reality, brokers look at overall loan suitability. This includes flexibility, lock-in periods, repricing options, and alignment with future plans. A loan with a slightly higher rate but better flexibility can outperform a cheaper but restrictive one over time.
Reducing the broker’s role to rate shopping underestimates the value of proper loan structuring.
Myth 9: Mortgage Brokers Do Not Add Value After the Loan Is Approved
Some borrowers believe that once the loan is approved, the broker disappears and offers no further support. This can be true of poor service providers, but it is not inherent to the role.
Many brokers continue to support clients by monitoring rate changes, advising on repricing opportunities, and helping with refinancing decisions when market conditions shift. Over a long loan tenure, this ongoing guidance can be valuable.
Seeing a broker as a one-off transaction rather than a long-term adviser misses a key benefit of the relationship.
Myth 10: Using a Mortgage Broker Is Risky or Unregulated
Finally, some people worry that working with a mortgage broker is risky or loosely regulated. This fear often stems from lack of familiarity rather than actual risk.
In Singapore, mortgage intermediaries operate within regulatory frameworks and industry standards. Professional brokers are expected to follow ethical guidelines, disclose relevant information, and act in the client’s interest.
As with any service, due diligence matters. Choosing a licensed and reputable broker significantly reduces risk.
Why These Myths Persist
Many of these myths persist because of outdated experiences or anecdotal stories passed from one person to another. The mortgage market has evolved, but perceptions have not always kept pace.
Another reason is that home loans are complex and emotionally charged decisions. When people feel uncertain, they rely on simple narratives, even if those narratives are inaccurate.
Breaking these myths requires understanding how the process actually works today, not how it may have worked years ago.
What a Mortgage Broker Actually Does
At its core, a mortgage broker acts as a bridge between borrowers and lenders. The broker assesses your financial situation, compares loan options across banks, and explains the trade-offs clearly.
Instead of approaching multiple banks individually, you receive a consolidated view of the market. This saves time, reduces confusion, and helps you make decisions with a clearer understanding of the implications.
The role is not about replacing banks, but about helping borrowers navigate choices more effectively.
Making an Informed Decision
Using a mortgage broker is not mandatory, and it is not always the right choice for everyone. However, deciding against one based on myths rather than facts limits your options unnecessarily.
The key is to evaluate your comfort level, your need for comparison, and the complexity of your situation. For many borrowers, having a knowledgeable guide through the process reduces stress and improves outcomes.
Whether you choose to work with a broker or not, understanding the myths helps you make a decision grounded in reality.
Final Thoughts
Myths about using a mortgage broker can be surprisingly persuasive, but they rarely reflect how the process actually works today. From cost concerns to fears about bias, many of these beliefs fall apart under closer examination.
A mortgage broker is not a magic solution, nor are they a hidden trap. They are a professional option that can add clarity, comparison, and structure to one of the biggest financial decisions you will ever make.
The smartest borrowers are not the ones who avoid options blindly. They are the ones who understand the landscape, question assumptions, and choose the approach that works best for them.
