Credit Proposal Disclosure for Mortgage Brokers

A credit proposal disclosure document tells your client what your credit assistance costs and what remuneration you expect to receive for the proposed loan. Give it at the same time you suggest a particular credit contract, help the client apply or suggest they remain in their existing contract.

The proposal belongs with the recommendation, so waiting until settlement misses its purpose. Its fee and commission figures must relate to the actual loan you’re discussing.

When the Credit Proposal is Required

Section 121 of the National Consumer Credit Protection Act 2009 requires a proposal when the licensee provides the specified credit assistance to a consumer. That includes recommending a particular loan with a particular lender, assisting with that application or a credit-limit increase, and recommending the client keep a particular existing loan. The current Act sets that timing at the point of assistance.

For a broker working as a credit representative, identify the licensee whose assistance you’re providing and issue the disclosure on that licensee’s behalf. The Australian Securities and Investments Commission (ASIC) explains these roles in its disclosure overview. Give the document to the consumer receiving the assistance, including each client in a joint application.

A lender submission summary explains the application to the lender. An internal recommendation note records your reasoning. Neither replaces the consumer’s regulated credit proposal disclosure document.

The sequence begins with the credit guide, which gives the client initial information about your business and complaints process. Where you charge a consumer fee, the credit quote comes before credit assistance and needs the consumer’s signed, dated acceptance. The preliminary assessment also precedes the assistance, while the proposal accompanies it.

A fee-free service can qualify for the quote exemption under regulation 28C, but that doesn’t remove the ordinary proposal requirement. Lender-paid commission still needs disclosure even when the client pays you nothing.

Costs, Commissions and Benefits

The proposal must disclose consumer costs separately from remuneration paid to you or your licensee. Section 121 requires your consumer-paid fees and their calculation method, reasonable estimates of indirect remuneration and application costs payable to the lender or other people. If those costs are funded from the loan, show the estimated credit available after paying them.

The September 2026 Regulations specify how the amounts must be presented. For each fee, name the recipient, explain the charge and say when and how often it is payable. Explain a variable calculation in words alongside its formula.

Show dollars as well as a percentage where you use percentage-based disclosure. Label an estimated amount as an estimate. A line saying only “commission: 0.60%” leaves the client to calculate the payment and doesn’t identify its recipient.

For indirect remuneration, identify each kind of payment or benefit and the person paying and receiving it. Include the required dollar totals for the licensee and credit representative, subject to the employee and director exception. Give the estimated dollar value of a non-cash benefit.

Also disclose payments by the licensee to third-party referrers, with the payer, recipient and known amount or reasonable estimate. The rules include volume-bonus disclosure, but disclosure doesn’t make a prohibited benefit lawful. Mortgage brokers must separately comply with the conflicted-remuneration restrictions.

Fictional Disclosure Example

This example uses invented names and amounts to explain the calculations. It isn’t an approved statutory form or a complete proposal. All amounts are Australian dollars on the fictional arrangements’ stated tax-inclusive basis.

Jordan Lee seeks a $500,000 loan from Harbour Example Bank through Seaside Example Credit Pty Ltd. Seaside is both the licensee and broker in this example. No separate credit representative receives remuneration.

Item	Who Pays and Receives It	Amount and Basis	When Payable
Broker assistance fee	Jordan pays Seaside	Known fixed amount: $550	Once, on settlement. Not payable if the loan doesn’t settle
Lender application fee	Jordan pays Harbour Example Bank	Estimated fixed amount: $300	Once, on application, even if approval is refused
Third-party valuation fee	Jordan pays Example Valuations Pty Ltd through the bank	Estimated amount: $250	Once, when the valuation is ordered
Upfront commission	Harbour Example Bank pays Seaside	Estimated amount: 0.60% of the assumed $500,000 eligible balance, or $3,000	Once, after settlement, subject to the fictional commission agreement
Referrer payment	Seaside pays Example Referrals Pty Ltd	Known fixed amount: $100, paid from Seaside’s commission	Once, after Seaside receives commission

In this simplified example, Seaside receives estimated indirect remuneration of $3,000. The $100 referral payment is disclosed separately and isn’t an additional fee for Jordan. There is no trail commission, non-cash benefit or volume bonus under these invented arrangements.

Jordan’s disclosed costs total $1,100: $550 plus $300 plus $250. If the $500,000 loan pays all these costs, estimated credit remaining is $498,900. If Jordan pays them separately, they don’t reduce the loan proceeds.

Estimates and Trail Commission

Base estimates on the proposed loan’s known terms and the actual remuneration agreement. Keep the loan balance, rate, payment frequency and tax treatment visible in the calculation record. Distinguish lender payments to the licensee from the licensee’s allocation to a credit representative.

For trail paid in instalments, regulation 28H(5) permits specified detail to be replaced by a reasonable estimate of the highest instalment. State the assumptions and payment period. This option doesn’t remove every other commission disclosure or the separate total-estimate requirement in regulation 28G(2)(d).

For example, a fictional 0.15% annual trail rate on a $500,000 assumed eligible balance gives $750 a year, or $62.50 per month. That illustrates a monthly instalment calculation, not a lifetime total. A lifetime estimate needs the repayment and balance assumptions for the loan term.

Regulation 28F allows specified fee details to be supplied through a quote reference when the disclosed amount is unchanged and the quote is no more than 30 days old. The proposal must retain the required fee identification and reference. Repeating the current fee details in the proposal can make the document easier to read.

Deliver and Acknowledge the Document

Deliver the proposal with the credit assistance and retain evidence of the document the client receives. Personal delivery is available. Electronic delivery needs the consumer’s consent and a format they can save and print.

Under regulation 28L, electronic consent follows an explanation that paper documents might stop, electronic messages need regular checking and consent can be withdrawn. For portal delivery, make the document available for a reasonable period, promptly notify the client of its nature and give them access to retrieve it.

The receipt requirement differs from signing a credit quote. The proposal rules don’t impose the quote’s signed-and-dated acceptance requirement. A receipt acknowledgement is useful file evidence, and your licensee can require it as part of its workflow.

For delivery other than personally or to a permitted person acting for the consumer, be reasonably satisfied the consumer received the document before further credit activities. Regulation 28L(8) permits that satisfaction for a proposal properly addressed and sent, unless the consumer advises otherwise. A bounce or a report that the link can’t be opened needs correction before you continue.

A Fictional File Timeline

The following timeline shows a fee-charging broker’s file. The dates and people are invented.

1. On 6 October, Jordan receives the credit guide and signs and dates the credit quote. The broker gives Jordan a copy of the accepted quote.
2. Before 9 October, the broker completes the preliminary assessment and records the reasons for the recommendation. Electronic-delivery consent and Jordan’s nominated email address are on file.
3. At the 9 October recommendation meeting, the broker sends proposal version 1 as a printable PDF while providing the credit assistance. Jordan confirms receipt and the broker saves that reply with the sent email.
4. On 10 October, Jordan instructs the broker to apply. The broker records that instruction separately from the acknowledgement of proposal receipt.

If the proposed lender, fee or service changes before assistance, correct the proposal before providing that assistance. Recalculate affected commission and net proceeds, issue the current version and explain the changed amounts. If a fee-charging service changes, revise the quote where needed and obtain the required acceptance before the changed assistance.

If a new recommendation follows an earlier one, issue a proposal matching the new assistance. Retain the earlier document and its delivery evidence so the file shows what the client received at each point.

Retain Reviewable File Evidence

Keep the final proposal and the evidence needed to connect it to the assistance you actually provide. ASIC’s best interests duty guidance, particularly paragraphs 273.162 to 273.172, explains its expectations for broker records. A commission disclosure alone doesn’t establish that a recommendation meets the client’s interests.

Store the supporting documents once and reference them by their date and version. The proposal can point to the accepted quote, preliminary assessment and recommendation record without duplicating the full inquiries and verification. The responsible lending workflow explains that assessment in detail.

File Record	What a Later Reviewer Can Establish
Proposal PDF with version, preparation date and client names	The exact content supplied for that loan and consumer
Accepted credit quote (where required) and copy-delivery record	The agreed service and fee before assistance
Preliminary assessment and recommendation reference	Which assessed loan the proposal accompanies
Commission agreement, fee schedule and calculation worksheet	The source of each amount, recipient, assumption and total
Electronic consent or personal-delivery note	Why the delivery method is appropriate
Sent email, portal notification and delivery or retrieval records	When the document is given and whether delivery fails
Client acknowledgement and application instruction	Receipt evidence and the separate instruction to proceed
Earlier versions and correction messages	What changes and which replacement the client receives

Retain the file under your licensee’s recordkeeping policy and any applicable longer retention requirement. Section 120 gives consumers a seven-year window from the credit quote to request a preliminary assessment when credit assistance is provided. That assessment-access rule is distinct from the proposal’s delivery rules.

Keep the proposal and its supporting evidence with the assessment throughout the period the file must remain available. Preserve records needed for an unresolved complaint or investigation beyond routine disposal dates. Before closing the file, confirm that someone reviewing it can identify the current proposal, reproduce its calculations and establish when each client receives it.