Runoff rate measures how many settled loans leave your book early, usually through refinancing or full repayment, while drop-off rate measures how many prospective clients start the loan journey and never finish it. One erodes future trail income; the other wastes acquisition effort today.
Movements in interest rates drive much of the first number, and slow responses to enquiries drive much of the second. This guide defines both rates for an Australian brokerage and sets out practical ways to measure and reduce each one.
Eliminate hours of manual data crunching and focus on building relationships with new clients.
Track My Trail makes it easy for brokers to keep track of lost & gained trail, discover clients who have paid off big chunks of their loans, and identify your most profitable clients.
Get Track My Trail for free today – no credit card required.
Runoff rate: why settled loans leaving hurts twice
A loan that pays out early stops paying commission for the remainder of its expected life, so a rising runoff rate quietly shrinks next year’s income while this year’s settlement numbers still look healthy. The drivers are predictable: rate movements that make refinancing worthwhile, fixed terms expiring onto uncompetitive revert rates and competitors’ win-back campaigns targeting your clients directly.
The clients most at risk are identifiable in advance. Loans approaching the end of a fixed period, loans written at a rate well above current pricing and borrowers whose life events typically trigger moves, such as upgrades or family changes, all warrant a proactive conversation before another broker gets there first. Strong customer service between settlements is what those conversations actually amount to: clients who hear from their broker at review points rarely take a cold call seriously. Monitoring the book for these signals and acting early is far cheaper than winning the same client back through a refinance at a lower margin.
Drop-off rate: where the funnel leaks
Drop-off rate is the percentage of enquiries or applications that fail to reach settlement. Every brokerage leaks somewhere: some prospects never return the fact find, some applications stall at credit stage and some clients go cold between approval and offer. Because each dropped file represents marketing spend and hours already invested, the leak compounds quickly.
Find your leak points by counting files at each stage of the mortgage process: enquiry, fact find complete, application lodged, approval and settlement. The stage with the largest proportional loss is where the work is. Long gaps without contact are the usual culprit, followed by document collection friction and slow lender turnarounds that give clients time to reconsider.
Reducing both rates in practice
- Track both numbers monthly: what is not measured cannot be managed; even a simple CRM report per stage beats gut feel.
- Contact at-risk loans ninety days out: a rate review call before a fixed term ends keeps the client with you rather than with whichever lender advertises next.
- Set follow-up service levels: a defined maximum gap between client touches during application keeps momentum and cuts drop-offs.
- Tell clients the truth about their options: borrowers who understand their loan structure ask fewer panicked questions when rates move, which makes them less likely to churn on impulse.
Automation helps with both problems. CRM workflows can flag anniversaries, fixed-term expiries and stalled files automatically, and analytics can score which settled clients look most likely to refinance elsewhere. The limits are real though: client records must stay accurate for any of it to work, and obligations around data security apply to every tool you connect to client information.
The regulatory backdrop
Retention activity has compliance boundaries. mortgage brokers operate under best-interests duties that govern refinance recommendations, and lenders periodically adjust their lending criteria, which changes what an existing client can qualify for. Keep advice records current and treat every retention conversation as advice worth documenting, because a well-run book is the foundation of genuine client retention.
Runoff and drop-off both respond to the same discipline: knowing where each client stands and making contact before a decision point arrives rather than after. This week, pull two reports from your CRM: settled loans reaching a fixed-term expiry or anniversary within ninety days, and live files untouched for more than fourteen days. Work those two lists first and both rates will start moving.
