There are a lot of varying sources out there on how much mortgage brokers and loan processors should earn. Of course, every mortgage brokerage is different, and not all may be able to offer six figure salaries.
We’re here to clear up the salary question. As specialist recruiters in the mortgage broking space, we know what the industry standard is, and what salary packages employers should be offering to attract the best quality candidates. Whether you’re a business owner wanting to know what to pay your team members, or a mortgage broker or loan processor looking to understand wages within the industry, here’s a snapshot of salaries in the industry.
Mortgage broker remuneration
How much money a mortgage broker earns can depend on their experience level, networks, support provided and commission structure. While an entry level position may pay about $55k plus super and commissions (depending on the position and company), mortgage brokers have a high earning potential as they develop their skills and grow their networks. Commissions also add to the earning power of mortgage brokers.
When it comes to mortgage broker salaries, one size does not fit all. From our experience recruiting in this space for the past eight years, we’ve found that there are three main payment structures that cater to different mortgage broker profiles in Australia. So it’s important to think about what profile mortgage broker you are trying to attract, and then build an offering around that. Typically we find all structures can fall within the three categories below.
1. Retainer + commissions
This style of remuneration is most suitable for mortgage brokers who have already developed strong networks and skills, and are essentially ready to work for themselves. They will often choose to work for an employer instead of themselves because of the systems and support in place to help them complete their work and get up and running.
In this scenario, the broker is paid a “retainer” every month (generally minimum wage), and when they accrue commissions beyond the retainer, the employer makes up the difference in a credit-debit type system. While paying a mortgage broker only commissions is not acceptable by law, this retainer + commissions structure is used by many in the industry.
The information in this article is of a general nature only and it is not intended to be a substitute for legal advice. To obtain legal advice regarding your obligations as an employer please engage the consultation services of a lawyer. We are happy to recommend our friends at Corvus Group for your employment law needs.
2. Base salary + commissions
Mid- to high-level brokers are generally offered a base salary package of around $70k-$100k, plus super and commissions. This sort of structure will often attract a good quality mortgage broker who relies on a steady wage for financial reasons, but is an excellent performer who can bring plenty of networks, experience and overall value to the business. Mortgage brokers that fall under this payment structure will often need the stability that a base salary provides, and will be unlikely to go self-employed if they’re well taken care of.
When hiring a mortgage broker under this payment structure, ensure that their wage is covered by the revenue they bring in. For example, if you’re paying them $100k per year, inclusive of super, set a threshold to ensure you’re getting that back before paying them further incentives (commissions). This will look like setting a threshold of 1.25–1.4 times their salary package to cover the hidden costs of their employment. In this example, you’d want them to generate $125k–$140k in total revenue to cover their costs. Divide this by four to get a quarterly threshold. Doing this monthly isn’t realistic due to the fluctuating nature of mortgage broking, so quarterly is recommended. Once they reach the threshold, pay them a decent share of the upfront commissions, 25–45% or more.
This remuneration strategy is clean and clear, and means you won’t have to worry about differing lender commission rates. The most important thing is to ensure the mortgage broker is covering their cost by generating enough income for the business.
3. Transition to self-employed, commission-only or equity/profit share
This payment structure is ideal for mortgage brokers that employers want to keep around long term. They’ll often require a base income for financial reasons, but may be successful enough to go out on their own. Employers may utilise this payment structure as a way to ensure brokers stay with them long-term, by offering a clear pathway to starting their own business or obtaining equity in the existing business. This is your retention strategy to ensure you don’t lose your recruit after you’ve invested all that time and energy in them. It’s important to evolve their payment model to ensure they’re financially engaged as they grow.
With any of the above remuneration structures, it helps to have a balanced scorecard for mortgage brokers in your team that measures them against compliance and customer focused metrics as well as revenue generation.
Loan processor remuneration
Loan processor salaries are most often based on experience level. While an entry level position may start around the $50k plus super mark, processors can develop efficiencies and complementary skills that will boost their earning potential. There are two main types of payment structures for loan processors.
1. Average/mid level
These types of loan processors will often have about 2–4 years of experience in a mortgage brokerage assisting a mortgage broker or team of mortgage brokers. They’ll be skilled at administration tasks and have a strong understanding of the industry, products, softwares and how to assist mortgage brokers in being more efficient. This mean they should have experience account managing multiple loan files (communication with both the customer and bank), and exposure using Apply Online and multiple aggregator software – for example Mercury, Podium, Flex etc. It’s normal for an employee with this level of experience to be paid about $65k, plus super. Nowadays, this is getting closer to $70k plus super.
Remember, if a loan processor is currently on $65k plus super, you may need to offer them an increase as part of your overall offering to entice them to join your business.
2. Senior level/Business Manager
Salaries for this level of experience will sit at about $70k–$90k, plus super. These roles will typically perform business management duties in addition to normal loan processing tasks. They may manage commission payments, compliance and employees. In many cases they’ll become a solid asset to the business, and can become the go-to resource for many business owners.
This can be a great career path for a loan processor who does not want to be a broker. It can give them a clear development path and further skills and responsibilities.
Remuneration isn’t the only reason employees perform well in a role or change employers. Things like flexible work arrangements, team culture, employee engagement and incentives all work together to provide an attractive offering for great talent. If, however, you come across an excellent candidate who is likely to take your business to the next level, you may need to look at developing a more attractive remuneration package for them. If you’d like further advice around what you should be paying, or what you should be earning, get in touch for a free business or career consultation.