Getting a mortgage is complicated enough without having to go  it alone – which is why two thirds of Kiwi borrowers now use an adviser.

When Teuila Field, a first assistant director based in Auckland, wanted to buy a home for her family of four last November, she turned to Squirrel for help.

As two freelancers buying in an expensive housing market, she and her partner knew they might struggle to convince a bank to lend them enough for a family-sized home, so they wanted someone in their corner.

“When you’re a freelancer and also a mother who’s taken parental leave, it makes it really difficult to get all your financial ducks in a row. Banks just look at the cold, hard numbers, not at the situation that you’re in,” she says.

“The advantage of dealing with a mortgage adviser is they can look at your personal financial position, and because they’re experts in their field, they know instinctively which banks might be more amenable to a customer depending on their stage of life.”

Field is one of a growing number of New Zealanders relying on mortgage brokers instead of going directly to their banks. Advisers originated 66% of new mortgages in 2024, up from just 30% a decade earlier.

Banks have allowed that to happen, effectively outsourcing some of their work as they closed branches and cut back specialised lending staff.

‘Advisers’ not brokers

Buyers have increasingly turned to mortgage advice since 2021, as rising interest rates and falling house prices have made getting a home loan that much more difficult.

At the same time, new regulatory rules pushed the mortgage industry further towards formal financial advice – meaning it’s now often about much more than just simply brokering a loan.

A good adviser can help you work out what you can afford, which lenders to approach, and how to structure a mortgage around the rest of your finances.

Adam Clark, a senior adviser at Squirrel, says the newer title far better reflects the role.

“Yes, I’ll broker the best deal for you, but that’s not really all the industry should be doing. We should be mortgage advisers, giving people genuine, independent advice to help them make better decisions,” he says.

This is the part of the job Clark says he enjoys most. He’s helped many first-home buyers get their finances into a lendable shape after they had almost given up on home ownership.

“And then six months later, I’ve got that same person on the phone with happy tears as they walk into their brand new home. That is an incredibly rewarding journey to be a part of.”

Beats flying solo

A typical process starts with a “discovery call” to deep dive into what the client wants to achieve and how their adviser can help make it happen. They assess their income, expenses, and debts, to work out what they can afford – and which lender might be best suited to their situation.

The next step is for the client to get all their documentation together before handing it over to the adviser who can then approach the banks to get the client sorted with a pre-approval.

Squirrel advisers will also guide clients through parts of the buying process, such as finance conditions, paperwork, deadlines and settlement steps.

Once you’ve found the home for you – and it’s all been signed off by your lender – advisers can provide guidance on how to structure your loan, from choosing rates and terms to whether splitting your mortgage or using revolving credit is right for you.

“There’s a really nice continuity of care throughout the entire journey from that first conversation to literally signing on the dotted line,” Clark says.

Advisers are particularly valuable for first-time buyers or those, like Field, with out-of-the-box financial situations – but they can reduce the admin load for anyone.

“Lots of my repeat customers will just call me and say, ‘I’ve just bought a property, can you fund it?’ And I’ll say, ‘Yep, no worries. Send me the paperwork.’ That’s all they have to do. It’s a five-minute phone call, and I do everything else for them,” Clark says.

After a client has secured a loan, their adviser helps them manage it. This can be a valuable service: a 2021 survey by Financial Advice New Zealand found homeowners who had an adviser did better than those flying solo.

According to the survey, 86% of advised owners reviewed and adjusted their mortgages each year, compared with 68% of unadvised owners. They were also more likely to increase their payments when their income rose: 61%, compared with 53%.

Small changes like these can make a big difference, potentially shaving years off a mortgage or tens of thousands of dollars from the total interest bill.

Banks pay the bill

Contrary to popular belief, getting advice from a mortgage adviser is almost always free for borrowers.

Mortgage advisers are typically paid by the bank or lender, rather than charging clients directly. Commission varies by lender but is often about 0.85% of the loan upfront, or 0.55% with an annual payment of 0.15%.

As a buyer, the concern with this model is the potential conflict of interest – i.e. advisers have a financial incentive to push you towards whichever lender pays the highest commission.

Regulatory changes in 2021 targeted that problem at an industry level – but Squirrel’s been ahead of the curve since day one, paying its advisers a fixed salary, with commissions based on application volumes rather than the commission paid by each lender. It means Squirrel clients have confidence they’re getting the mortgage solution that’s right for them. Clark reiterates this point: “The way we work at Squirrel means the advice is 100% impartial. I work totally for the benefit of my clients, and not everyone in the industry can say that.”

The adviser model worked well for Teuila Field. Squirrel helped her get the loan she needed to buy a family home in Auckland, and even negotiated a sweetener from the bank.

“They’ve got the inside word on things like cashback schemes, which we were eligible for in our case. We had no idea that this particular bank, that we were hoping to get a home loan from, was offering a cashback,” she says.

“If you’re outside of that world, it’s just really helpful to have somebody on the inside whose job it is to understand that landscape.”