How are brokers are paid?

Mortgage brokers are typically paid for introducing home loans to banks and mortgage lenders. In most cases a broker will be paid an upfront remuneration of between 0.5% to 0.75% of the loan amount. This is usually paid thirty to sixty days after the loan settles.

In addition to this brokers are usually also paid (but not always) a trailing commission of between 0.1 to 0.4% of the loan amount, whilst the loan remains in place with the lender. This is usually paid on a monthly basis.

For example, on a $400,000 loan, a broker may receive an upfront payment of 0.6%, which would equate to $2,400 and trailing remuneration of 0.25%, which would be $83 per month.

There are no additional fees for borrowers to pay to cover this remuneration and as such they are not disadvantaged by engaging a broker as opposed to dealing direct with a bank.