In an unregulated industry, you have to do your own homework.

If you're about to buy your first home or are trading up to a bigger property and acquiring more debt, how do you know whether your mortgage broker is getting the best possible deal for you? The industry remains largely unregulated, there are hundreds of lenders and although consumers tend to be better educated than they were a decade ago, financial services are more complex.

"It's not easy," says Peter Hayward, Citibank's head of mortgage distribution. "But do your homework, know what you want and, if you're not sure, get a second opinion."

Hayward firmly believes that the power to get the best deal resides with the consumer.

"The borrower should start with some idea of what they need," he says. "Getting a home loan is a big deal. But if anything is unclear, the consumer can go to the lender, which is where the contract ends up, or back to the broker."

Warren Shaw, National Australia Bank's general manager of mortgages, says: "Anyone who thinks we've got the power is mistaken - the customer has the power."

An accommodating attitude from the banks means customers don't have to settle for a standard loan. Hayward says few banks push loans on low rates alone. "It's been about the bells and whistles for some time," he says.

Tim Brown, the head of Macquarie Mortgages, says Macquarie offers a range of sophisticated mortgages. "Our clients want flexibility. A good broker is going to be able to assess a client's needs and get them a product that suits."

Loans with multiple features often come with higher interest rates. "Do you need a high-cost loan?" Hayward asks. "Make sure you're certain that what you're offered meets your needs."

Regulated at last

State ministers are continuing their drive toward uniform regulation for Australia's mortgage brokers.

A spokesman for the NSW Fair Trading Minister, Diane Beamer, says the proposed reforms are still in the draft stage but all states are close to agreeing the format.

The draft bill is likely to include the following reforms:

Brokers to undergo probity checks.

They must be members of an approved alternative dispute resolution scheme.

They must have a certain level of specific skills and improve those skills continually as a condition of their licence.

Brokers will neither be allowed to charge upfront fees nor be able to lodge caveats over property to secure those fees.

Consumers have access to redress that takes into account losses where an inappropriate product has been recommended.

There will be provision for a stay of enforcement in relation to the borrower's primary residence where damages are being claimed from a broker.

They must have indemnity insurance.

Brokers will also have to disclose the cost of new loans and services before broking an agreement with a borrower. A broking agreement must contain specific details of the client's needs and state why a particular product was recommended. And there must be a reasonable basis for a broker making any recommendation.

There is also hope that the wording of the legislation might go some way towards protecting consumers who take out a reverse mortgage.

"I expect the first draft to be published within the first six months of this year," says Phil Naylor, the head of the brokers' industry body, the Mortgage and Finance Association of Australia.

"Regulation will make a big difference to the way the industry works. The best we can do as an industry body is expel people who don't abide by our code of conduct.

"They still operate. They don't operate in the best environment but they are still out there.

"Regulation means people operating on the sidelines will be dealt with."