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If you’re thinking about how to become a broker in Australia, you’re also probably thinking about the typical salary that this position commands. What you should know is that a mortgage broker salary depends on the business model that the mortgage broker operates under. Are they employed by a business? Are they a franchisee? Are they a business owner? Each segment tends to be remunerated differently.

Whatever your model of operation is, there are plenty of ways to improve your earnings through salary, commissions and more. Read on to find out how much does a mortgage broker earn, and how to become a broker that can earn a substantial remuneration package by partnering with some of the best aggregators in Australia.

Earning a mortgage broker salary in Australia

If you were to ask anyone in the industry how much does a mortgage broker earn you would most likely get very mixed results.

The truth is that many mortgage brokers don’t earn a fixed salary at all; instead, they are remunerated through commissions on the loans they write. For example, if you are employed by a broker firm or business, there is a higher chance that you may earn a salary, but this salary tends to be modest. The average base mortgage broker salary was approximately $54,000 when ASIC reviewed the industry in 2017 – keeping in mind that this figure does not include the earned commissions that employed loan writers also earn alongside their mortgage broker salary.

On the other hand, becoming a mortgage broker that operates as an independent contractor may not earn you a salary, but the upside of this is that growing a significant loan book that you own, can earn you much more over the long term than what you could expect to earn as an employee.

But how much does the average mortgage broker earn, in total? The good news is mortgage brokers make significantly more than the national average – and with the housing market going through a period of significant growth, earnings have also continued to rise. So if a mortgage broker salary is rare, how do mortgage brokers earn so much?

In a word: commissions.

The value of commissions to a mortgage broker

There are two types of commissions that brokers earn when they write a loan. The first is an upfront commission. This is paid by the bank or lender when a client takes out a loan with said lender. However, if the client refinances within the first two years, banks tend to require brokers to refund the commission.

The second type of commission is known as a ‘trail commission’. This is also paid by the lender. But instead of a one-off fee, brokers earn a yearly commission from lenders when the borrower pays on time and stays with the lender. The amount earned is a percentage of the remaining balance of the loan, and therefore the trail commission gets smaller as the borrower pays off the loan. For those learning how to be a mortgage broker in Australia, it’s important to know that the trail can make up a substantial amount of recurring revenue over time and should therefore constitute an integral part of your business strategy.

How much commission does a mortgage broker get?

The trail commission tends to be 0.05% to 0.15% of the remaining loan balance, paid per year, not including Year 0 (when the loan is initially written). For example, if you had written a $500,000 loan with a lender that delivers a 0.15% trail commission, your earnings could look like this:

  • Year 1: $691
  • Year 2: $577
  • Year 3: $481
  • Year 4: $401

But how much does a mortgage broker earn through upfront commissions? ASIC reported that brokers were paid an average of 0.54% of the loan that they had written. That means that if a broker writes a $500,000 loan, they receive a $2,700 commission.

However, it should be noted that most of the time, banks and other lenders actually pay out between much less when their loan products are sold by a third party. So what explains the difference between what the banks pay out, and what the mortgage broker receives? The answer is an intermediary known as a mortgage aggregator.

If you’re learning how to become a broker, it’s important to understand the role of an aggregator, one of the key parties in the mortgage broking business. Good aggregators can provide you with tremendous value as a mortgage broker, so while they may be taking some of your margin, what they offer in return can significantly improve your mortgage broker salary.

How to become a broker with an aggregator, and what is their value?

Aggregators offer a panel of lenders for brokers to access on behalf of their clients. Aggregators also process commissions and provide a wide range of services to support their mortgage brokers. These services include lead generation, access to proprietary industry software, compliance support, and marketing support. As an intermediary between the lender and broker, the aggregator takes a cut of the commission to generate revenue and provide services back to the broker.

So how much commission does a mortgage broker get in total? Usually around 80% of what the lender pays out. Despite the extra costs, good mortgage aggregators deliver increased value to mortgage brokers in the form of regulatory compliance, marketing support, access to better deals and much more.

The value of aggregators for those learning about how to become a broker

Aggregators are extra important for newcomers who want to learn how to become a finance broker or mortgage broker. Once you have the right educational qualifications, your next step should be to find an aggregator that will help you start your mortgage broking career.

Beyond the aforementioned benefits, some mortgage aggregators also run mentoring programs for new-to-industry brokers, who are unable to operate independently, or for those looking to maximise their mortgage broker salary. For those learning how to be a mortgage broker in Australia, examples of MFAA-approved mentoring programs include eChoice Mentoring, Aussie Mentoring and Finsure Finance and Insurance.

When you’re learning how to become a mortgage broker, you face a confounding number of options. This is why we recommend that if you are planning on becoming a mortgage broker to join a mortgage aggregator who has the resources and team to support your startup and growth. The right aggregator can make becoming a mortgage broker as simple as sending an email.

Learn more about finding the best broker aggregator here, or simply get in touch using the form and we’ll match you with an aggregator that best suits your needs.

How much does a mortgage broker earn?

How much a mortgage broker earns in Australia is dependent on their salary, commissions and trail. For the few who earn a mortgage broker salary, the yearly rate is around $54,000. But when commissions are added, the number jumps significantly.

The most recent MFAA Industry Intelligence Service reports that the national average for broker remuneration is $161,894. That means broker remuneration is at its highest since the MFAA began to report on this metric.

This result is a continuation of a strong growth trend that began in April 2019. Every half-year since, mortgage broker remuneration has grown an average of 5.4%.

So how much commission does a mortgage broker get in each state? Queensland took home the gold for the highest gross earnings per broker, recording an average remuneration of $168,794. Not far behind was NSW/ACT, and then WA, which recorded earnings close to the national average. Bringing up the rear was the Northern Territory, where brokers earned an average of $141,000.

Something to keep in mind as you learn how to become a mortgage broker in Australia is that these remunerations aren’t a consistent mortgage broker salary. The amount a mortgage broker can earn varies wildly. Remuneration is almost entirely performance-based, and there are usually no baselines. For example, even though the national average of mortgage broker salary including commissions and trail was $161,894, ASIC also reported that 10% of brokers who work as independent contractors make over $250,000 a year.

Such fluctuation can be down to a number of reasons, but due to the commission structure, how much you earn as a mortgage broker is entirely up to your efforts and the partnerships you make. It is for this reason that mortgage aggregators remain an integral part of the ecosystem to this date.

The traits of a good finance broker

While the job isn’t for everyone, because the average salary of a mortgage broker in Australia is quite high, the decision to become a mortgage broker is tempting.

As a broker, your clients are entrusting you with their life goals, and you have to be willing to deliver in a high stakes environment. If you want to know how to become a mortgage broker in Australia that is successful and trusted, here are some traits which will help tremendously:

  • A fantastic listener and communicator—mortgage broking is all about relationships, and relationships are all about communication. Listening skills will allow you to parse through a lot of information to get to the heart of your client’s needs.
  • Analytical—quickly and accurately assess the financial standing of clients and measure against loan products in the market.
  • Methodical—able to consistently work through complex processes.
  • Empathetic—always has the client’s best interests at heart, and has an ability to anticipate the client’s next concern.
  • Independent—able to operate alone, confidently. This is especially important if owning a business is on the horizon.
  • A good negotiator—willing to push the envelope with lenders in order to secure the best deal for borrowers.