Mortgage broker salary in Australia

If you ask anyone how much a mortgage broker earns, you’ll likely get a wide range of answers.

Mortgage brokers employed by a brokerage firm may receive a base salary, but it’s often modest. When ASIC reviewed the industry in 2017, the average base mortgage broker salary was approximately $54,000. More recent sources suggest base salaries have increased since ASIC’s 2017 review.

Table: Data sources on mortgage broker salaries in Australia

Becoming an independent mortgage broker may mean you don’t earn a salary. However, the upside is that building a large loan book you own can increase your earning potential well beyond what you could expect as an employee.

Many brokers can earn more than the national average, and earnings can rise further during periods of strong housing activity. So where does that extra income come from?

In a word – commissions.

The reality is, many mortgage brokers don’t earn a fixed salary at all. Instead, they’re paid through commissions on the loans they write.

Mortgage broker commissions refer to the compensation brokers receive for facilitating a mortgage or loan transaction. Mortgage brokers typically earn commission from the lender, calculated as a percentage of the loan amount. The commission structure can also vary depending on the loan type, loan amount and the agreement between the broker, lender and aggregator.

When a broker settles a loan, their income is usually made up of two components:

• The first is an upfront commission, paid by the lender at settlement. However, if the borrower refinances or discharges the loan within the first few years, the lender may apply a clawback and require the broker to repay some or all of that amount.
• The second is trail commission, which is paid over time while the loan remains in place and repayments are maintained. Trail is typically calculated as a percentage of the outstanding loan balance, so it generally reduces as the borrower pays the loan down.

For those learning how to be a mortgage broker, trail can become a significant source of recurring revenue and is often a key part of long-term business planning.

The commission a mortgage broker receives can vary based on the agreement between the broker, their aggregator and the lender. In Australia, upfront commission is commonly around 0.60% to 0.70% of the drawn loan amount (excluding GST), though it can be higher in some arrangements. Trail commission is often around 0.10% to 0.20% a year of the outstanding loan balance (often calculated net of any offset balance), and it generally reduces over time as the loan balance is paid down.

For example, on a $750,000 loan with a 0.15% p.a. trail rate, the trail earnings could look like this (illustrative, based on a reducing balance):

• Year 1: $1,037
• Year 2: $866
• Year 3: $722
• Year 4: $602

Upfront commissions are typically calculated as a percentage of the loan amount, but the amount a broker business receives isn’t always the same as what the lender pays out in total. ASIC has previously reported that, on average, broker businesses received around 0.54% upfront commission. On a $750,000 loan, that equates to about $4,050.

If a broker were to settle four loans per month and the average loan size was $750,000, this would equate to $194,400 per year in upfront commissions alone.

It’s also worth noting that commission is often paid via a mortgage aggregator first. The aggregator retains an agreed share for the services they provide and then passes the remainder on to the broker business, which is why the lender’s total commission payment and the broker’s received amount can differ.

Even after these deductions, commissions can make a dramatic difference to what you take home. That’s why mortgage broking can be so rewarding – your earning potential isn’t capped by a base salary, it grows with every settlement and the loan book you build over time.

Behind the scenes of many successful mortgage brokers are mortgage aggregators. Clients usually won’t see this relationship because they don’t deal with the aggregator directly, but aggregators play an important role by providing services and support that help brokers operate and grow.

One of the biggest benefits is access to a broad panel of lenders and loan products, which makes it easier to match clients with suitable options and stay competitive. Strong aggregators also support brokers with compliance requirements, technology platforms, training and even marketing support – all of which can reduce admin load and help brokers spend more time writing loans.

Aggregators can use their combined volume to negotiate better terms with lenders, which may improve pricing, turnaround times and, in some cases, commission arrangements for brokers.

This is why finding the best mortgage broker aggregator is an important step for brokers who want the right support, the right lender access and robust long-term earning potential.

Mortgage broker earnings for self-employed brokers can vary significantly depending on experience, location, client base and how effectively the business generates consistent loan settlements. As a self-employed broker, your income is usually driven by the volume and size of loans you settle, plus the trail income that builds over time as your loan book grows.

If you are exploring this path, make sure to have the appropriate mortgage broker qualifications.

Starting a brokerage firm and scaling revenue with a team

For many brokers, the next step beyond being self-employed is starting a brokerage firm. This is where revenue can scale – not just from your own settlements, but from building a team of brokers who write loans under your brand. With the right structure, a brokerage owner may earn through a share of commissions generated across the business, plus the long-term value of a larger aggregated loan book.

Costs, volatility and what to plan for

As a mortgage broker, you should expect your income to fluctuate with market conditions and consumer demand. Brokerage firm owners also need to factor in the cost of growth, including salaries or commission splits for staff, marketing, technology, licensing and other office overheads. When managed well, building a brokerage can increase your earning potential beyond what’s possible as an employee or a solo broker.

The most recent MFAA Industry Intelligence Service (IIS) reporting for 1 October 2020 to 31 March 2021 puts national average broker remuneration (upfront plus trail, prior to costs) at $161,894 – the highest result recorded since the IIS began tracking this metric.

That national number is useful context, but earnings can differ by state because factors like average loan sizes, market activity and broker volumes vary across the country. In the same period, Queensland recorded the highest average gross remuneration per broker at $168,794, followed closely by NSW/ACT at $168,248.

It’s important to keep in mind that these figures are gross remuneration estimates (before business costs and any commercial arrangements), and broker income can vary widely based on performance, loan book size and business structure. If you’re planning to build a sustainable pipeline and manage costs as you grow, creating a mortgage broker business plan can help you set clear targets and track profitability.