Jul 3, 2025
At Select Loan and Mortgage, we believe in transparency, trust and professional guidance for every client. Whether you are buying your first home or refinancing your current loan, it is critical to work with someone who puts your needs first and that is exactly what the Best Interests Duty (BID) is all about. But what exactly is BID? Why is it important? And how does it protect you as a borrower? Let’s break it down.
What is the Best Interests Duty (BID)?
The Best Interests Duty is a legal obligation introduced by the Australian Government that requires mortgage brokers to act in the best interests of their clients when providing credit assistance. This means that your broker must prioritise your needs, goals and financial wellbeing above all else including their own commission or the lender's preferences.
When was BID Introduced?
BID became law under the National Consumer Credit Protection Act 2009 (NCCP Act) and officially came into effect on 1 January 2021, as part of broader reforms led by ASIC (Australian Securities and Investments Commission).
To learn more about the guidelines that govern the Best Interests Duty, you can refer to the official Regulatory Guide 273.
How does BID protect you?
In simple terms, BID means your broker must always act in your best interests not what earns them more money or benefits a particular bank.
This includes:
Assessing your personal situation — income, expenses, credit history, future plans etc.
Researching a broad range of products from different lenders (not just one bank)
Recommending the loan that’s most suitable based on your needs, not theirs
Explaining the reasons behind their recommendations
Avoiding conflicts of interest (e.g., picking a high-commission loan over a better-value one)
Example: BID in Action
Imagine this scenario - You qualify for two loan products:
Loan A: Slightly higher interest rate, pays the broker a higher commission
Loan B: Lower rate, lower fees, better repayment flexibility, but pays less commission
Under BID, your mortgage broker is legally obligated to recommend Loan B because it is the loan that serves your interests better.
What we do at Select Loan and Mortgage?
At Select Loan and Mortgage, BID is not just a legal duty -it is a promise we take seriously. Here is how we put your best interests first:
1. Holistic financial review: We take time to understand your financial situation, lifestyle needs and future goals.
2. Wide market comparison: As part of the Connective Group, we have access to more than 25 reputable lenders and hundreds of loan products - giving you a wider range of options and highly competitive rates.
3. Clear professional recommendations: We explain our reasoning, outline all fees and charges, and ensure you're fully informed before making any decision.
4. Support from start to settlement: We guide you through every step - pre-approval, application, negotiation and settlement.
5. No additional cost to you: Our service is free for you as we are paid by the lender you choose - but we will never let that influence our advice.
How to know if a Broker is acting in your best interests?
Here are some signs that your broker is complying with BID:
1. They ask detailed questions about your goals and financial situation
2. They compare multiple loan products, not just one or two
3. They disclose all costs, features, and potential trade-offs
4. They provide a clear justification for their recommendation
5. They encourage you to ask questions and take your time
If you ever feel rushed or unsure that is a red flag. With BID in place, you are entitled to expect more.
Why BID builds trust in Brokers?
For many people, buying a home is the biggest financial decision of their life. BID ensures that brokers like us are not just facilitators – we are your trusted advisers, guiding you through complex choices with your best outcome in mind. It’s one of the key reasons why more Australians are turning to brokers over banks.
Your Loan, Your Future: Our Responsibility
Choosing the right home loan can save you thousands over the life of your mortgage. That is why having a broker who is legally and ethically committed to putting your interests first is not just important it is essential. At Select Loan and Mortgage, we do not just offer loans - we offer clarity, confidence and commitment.
Ready to make a smart home loan decision?
If you are ready to explore your options or just want a second opinion, we are here to help and we will always act in your best interest. We are just a phone call or click away. Contact us at +61 489 922 603 or fill out our online form to schedule a free consultation with a mortgage specialist.
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