A trail book is the settled home loans a broker or brokerage arranged that still pay monthly trail commission. Each loan contributes future income while it remains eligible for trail. Owning the book gives you contractual rights to commission, not ownership of the borrowers’ loans.
What Counts as a Trail Book
A trail book contains the loans that generate ongoing trail for your business. Brokers also call it a loan book, mortgage book, book of business or client book. In a trail discussion, those names describe the income-producing loans and the rights to their future commission.
A client list can be wider than a trail book. Someone whose loan has discharged can remain your client, but that discharged loan no longer earns trail. An approved loan awaiting settlement belongs in your pipeline until it settles and becomes eligible for commission.
The borrower owes the debt and the lender holds the loan asset. Your book is the contractual income stream arising from arranging those loans. Buying a trail book involves acquiring commission rights under the relevant agreements.
What Each Loan Record Holds
Each loan record connects a loan’s identity and balance with the trail it pays. A useful record holds the following fields.
| Field | What it tells you |
|---|---|
| Lender | Which institution pays the commission |
| Loan number | Which loan the payment belongs to |
| Settlement date | When the loan began and how old it is |
| Original balance | The starting amount, for comparison with later balances |
| Current balance | How much remains outstanding in the reporting period |
| Trail rate | The rate used to calculate ongoing commission |
| Monthly trail paid | The payment recorded for that loan and period |
The aggregator’s monthly commission statement lists payments loan by loan. Its detailed export lets you match the lender and loan number to the amount paid. Keep the original settlement details beside those monthly records when an export does not carry every field.
For example, a hypothetical book could contain 100 active loans across several lenders. The statement shows each loan’s payment, while the combined records show the book’s total balance and trail income. One borrower with two loan accounts needs two identifiable loan records, even though both belong to one client.
A payment statement records what arrived. A missing payment alone does not prove a loan discharged, so compare it with earlier statements before removing that loan from your records.
Who Owns the Book
The aggregation agreement determines the member’s entitlement to trail, including what survives an exit. An employed or contracted broker’s agreement with the brokerage also determines their share. Holding the client file does not establish a personal right to all future trail.
Read the clauses covering commission entitlement, termination and transfer or assignment together. An exit can leave existing trail with the former aggregator for processing even when new business goes elsewhere. The agreement decides the payment arrangements, ongoing deductions and conditions on transferring the rights.
A published aggregation agreement illustrates the clause types involved. Connective’s Full Member Agreement separates transfer rights from termination consequences. Its transfer provisions recognise lender restrictions and an unremedied material default. Its termination provisions allow deductions from commissions still payable. These are provisions in that published agreement, not standard terms for every aggregator.
A brokerage with several brokers can keep a named book for each broker while holding the aggregation agreement through one business. Separate records show whose loans earned each payment and support agreed pay-outs. They also identify exactly which loans belong in a proposed sale.
Track My Trail’s Trail by Broker separates the brokerage’s trail by broker. Elite Suite also keeps up to five aggregators or trail books together, with each available to view separately. These reporting groups help you analyse the book, while your agreements govern contractual rights.
Why a Trail Book Shrinks or Grows
Discharges and falling balances shrink a trail book. Eligible new lending grows the book when it exceeds those losses. Runoff is the loss of balance or trail from the existing book over time.
A refinance away ends the old loan’s trail. Regular principal repayments and lump-sum repayments reduce the balance that earns commission. Offset funds also reduce the commission-bearing balance under net-of-offset arrangements. The Mortgage & Finance Association of Australia’s broker remuneration factsheet explains that basis.
New settlements add loans to the book once eligible for trail. Top-ups can increase the balance that earns commission. A refinance you retain replaces the old loan with a new loan in your book, subject to the new lender’s commission terms. Both balances do not keep earning trail indefinitely.
Loan count, total balance and trail income can move differently. Extra offset savings can reduce trail without closing a loan. New settlements can increase the loan count while discharges remove larger balances. Compare your losses with the average runoff rate for mortgage brokers when assessing how quickly the existing book is reducing.
Trail Book Value, Sale and Finance
A trail book can be valued, sold, passed through an estate or used to support borrowing, subject to its contractual rights and transfer conditions. Its runoff and loan mix affect how much future income a buyer or lender expects. Different assessments apply to valuing a mortgage broker business, buying a trail book and arranging trail book finance.
Keep the loan-level schedule alongside the monthly statements and the agreements that establish your entitlement. Together, they let a buyer, lender or aggregator trace the income to individual loans and assess what continues after a proposed transaction.
