Australian mortgage brokers are commonly paid by the lender through an upfront commission after a loan settles and a trail commission while the eligible loan remains in place. Some brokers also charge a client fee under a written agreement.
The amount and conditions vary by lender, aggregator and agreement. The broker should disclose how they are paid, explain any client fee and avoid presenting a general percentage as a fixed industry rate.
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How Lender Commission Works
Many mortgage brokers receive lender commission through their aggregator. This payment is separate from any disclosed broker fees charged to the client.
Upfront Commission
upfront commission is generally linked to a settled loan and the lender’s commission schedule. Mortgage broker earnings still depend on business costs, aggregator deductions, staff expenses and the number of suitable loans that settle.
Trail Commission
trailing commissions may be paid over time while the loan remains eligible. The basis, timing and exclusions should be taken from the current agreement rather than assumed.
Settlement And Clawback
Commission usually depends on settlement. A Clawback may require some upfront commission to be repaid if the loan is discharged or changed within the lender’s stated period.
Early refinancing can therefore affect broker income, but the client’s interests remain the basis of the credit assistance. The broker should not steer a client away from a suitable change to preserve commission.
What Can Change The Payment?
Loan type, balance, lender schedule and aggregator agreement can change the result. Investment loans do not create a single universal commission rate. Product features such as interest rates or an offset account should be assessed for the client, not for their effect on broker pay.
