One of the most daunting tasks when it comes to finding the right home loan is sifting through the different types of mortgages available. There’s no shortage of financial products out there from direct lenders, retail lenders, mortgage brokers, wholesale lenders and others.


With so many different lending institutions and financial products available these days, it’s hard to keep track of what is what, and which new mortgage may actually suit you. Before you commit to a loan, it’s important you do your homework and this includes understanding the difference between wholesale and retail mortgage lenders.

Wholesale mortgage lenders

Wholesale lenders are lenders that don’t deal directly with the consumer, instead they offer their loans through intermediaries such as mortgage brokers. Some banks even own wholesalers, but don’t widely advertise the fact. Put simply, a wholesale lender is one who doesn’t have the same “mark up” on their margins, because they don’t have the same overheads or need to generate ever-larger record profits each year. They run leaner operations and pass the savings back to you in the form of lower rates.

It’s important to note that all wholesale lenders are bound by the same rules and regulations that govern all financial lending bodies within the Australian mortgage market.

Retail mortgage lenders  

Retail lenders are exactly what they sound like, lenders who provide mortgages directly to individual consumers. Credit card companies, banks and credit unions as well as many alternative lenders are all classified as retail lenders.

It’s important to note that retail rates are generally offered by institutions whose primary responsibility is to their profit margin and their shareholders. This can result in you paying higher rates than are actually necessary.

The better deal

As with anything else you purchase, it’s important you do your research before committing to a home loan. By having your broker research and compare wholesale and retail lender rates, you can ensure you get the most competitive rate.

A recent report by one of Australia’s major banks revealed the most common reason that people approached a retail lender instead of going the wholesale lender route is because they already had accounts with them. However the convenience of staying with the familiar could be costing you thousands of dollars each year.

Speak to Force Financial Services today to find out if you can access a wholesale mortgage and potentially save thousand of dollars.

Australian Credit Representative #480911