How Do Mortgage Brokers Get Paid in Australia?
Becoming a mortgage broker can be rewarding. The role offers high earning potential and doesn’t require a university degree. However, there are important factors to consider before entering the industry.
How Mortgage Brokers Make Money
Mortgage brokers in Australia earn income in several ways:
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Commissions from banks and lenders
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Trail commissions over the life of a loan
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Bonuses from broker groups or financial institutions
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Service fees (rare and less common)
Unlike many other professions, mortgage brokers are paid by the lender, not the borrower. This means clients don’t usually pay out-of-pocket for a broker’s services.
Commission-Based Pay Structure
Most Australian brokers don’t receive a regular salary. Instead, lenders pay them a commission when they successfully settle a home loan for a client.
There are two main types of commissions:
1. Upfront Commission
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Paid once the loan settles
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Typically ranges between 0.65% and 0.7% of the loan amount
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For example, on a $400,000 loan, the broker might earn $2,600 to $2,800
2. Trail Commission
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Ongoing payment for the life of the loan
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Usually between 0.165% and 0.275% of the loan amount annually
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Paid only if the client stays with the same loan and avoids default
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Encourages brokers to place clients in sustainable, long-term loans
If a client defaults for more than 60 days, the trail commission stops, and the broker may even need to repay part of the upfront commission.
Who Pays Mortgage Brokers?
Banks and lenders pay mortgage brokers—not the borrowers. When a broker introduces a client and the loan is approved, the lender rewards the broker with a commission. In return, brokers help clients compare home loan products and choose the one that best fits their needs.
Some lenders offer higher commissions than others. However, all brokers must follow best interest duty (BID) regulations, which require them to prioritise the client’s needs over commission opportunities.
Tips to Maximise Earning Potential as a Mortgage Broker
To increase income, mortgage brokers should:
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Focus on providing excellent customer service
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Perform regular loan reviews for clients
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Cross-sell relevant financial products
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Negotiate favourable commission terms with broker groups or aggregators
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Specialise in niche markets such as investment lending or low-doc loans
Some brokers also choose to charge fees for service instead of or in addition to commissions. However, this model is less common and may not suit all markets.
Final Thoughts
The mortgage broker industry offers flexibility, income potential, and the opportunity to help clients make significant financial decisions. While brokers are paid by banks, their duty is to act in the best interest of the client. Understanding commission structures, trail payments, and how income is generated is crucial for anyone considering this career path.
