How much money does a finance and mortgage broker make?

Despite the doom and gloom news stories, the Australian property market will bounce back. According to Corelogic stats, residential property values are in growth territory as at the end of 2019. While the coronavirus pandemic has added additional challenges to the property market in 2020, over the long term Australians’ love affair with property will remain.

At the same time, it’s true that lenders are getting stricter with what they require from borrowers. Interest rates may be low, but ‘stress tests’ are higher and it can be hard to keep up with what grants and assistance are available in the market. As a result, there’s one group of property professionals whose services are more in demand than ever: mortgage brokers.

Mortgage brokers have special skill sets that go beyond just product knowledge. Finding a good fit with a mortgage product involves getting to know clients’ circumstances; their goals, needs, risks and more. Part of the value that brokers bring to the transaction is keeping the paperwork in order and making sure it’s submitted on time, to the right standard. This requires some serious organisation and people management skills. In short, in the process of a transaction the broker builds and maintains relationships with multiple parties, including clients, lenders, and sometimes third parties (such as guarantors/co-signers).

What is the average mortgage broker salary?

Brokers are compensated well for the effort they put into these relationships. According to ABS stats, the average mortgage broker brings in $2,009.10 a week. That’s a fair bit more than the national average full-time income of $1,288.70 a week. Some mortgage brokers, such as senior practitioners and practice owners, make even more than this.

How do mortgage brokers get paid?

There are a number of different ways that mortgage brokers are compensated. Some work for lenders and are paid a salary, with a variable bonus structure. Some work for finance and mortgage broking practices (licensees), and are paid only commissions on the transactions they settle, but may also receive ‘trail’: a commission over the lifetime of the loan.
In addition, the same broker may help a client many times over a lifetime. For example, they may help them find a better mortgage deal after a few years when factors such as the LVR (loan to value ratio) have changed. Other employees in the industry, such as administrators who work on client files, are usually paid a flat salary.

What commission do mortgage brokers get paid?

In Australia, mortgage brokers are paid a commission by lenders, for introducing clients to home loans. So brokers are paid by the lenders and not the customer. This type of payment is called the upfront commission.
Mortgage brokers can also earn a trail commission. Brokers are paid the trail commission by lenders over the lifespan of the loan. So it is a deferred payment. The trail commission will be based on the overall balance of the loan, and you will receive this commission every month for as long as your client has that loan from the lender.

Benefits of becoming a finance and mortgage broker

Unlike many career paths out there, you don’t need a degree to become a mortgage broker as a Certificate IV is the minimum requirements. Saving you thousands of dollars on tuition fees, and allowing you to progress into a job faster.

Once you become a mortgage broker, you will be required to meet Continuing Professional Development (CPD) requirements. In doing so, you will be kept up to date with trends and industry regulations. This will help you to stay on top of your game throughout your career.

Being a mortgage broker gives you the option to work for yourself or within a brokerage. There is also an opportunity for progression in the industry. If you keep up to date with what’s happening in the industry and work hard on furthering your skills, you could make a really great career for yourself as a broker.

As a mortgage broker, each day will be different. Having this variety in your job will help to keep you interested, engaged and motivated. There will be a variety of lenders, clients and situations that you will work with. Some brokers tend to stick with just financing residential and investment property loans, but finance brokers to have scope for more variety. YIf you choose to do so you can help clients into a property for office, retail and warehouse spaces as well as loans for cars and equipment.

One of the best things about being a mortgage broker is the flexibility it provides. You can choose to work for yourself or a brokerage. Your choice of who you would prefer to work for could also change depending on what stage of life you’re in. Working for yourself can be a great option for stay at home parents. It will also mean you are in charge of your hours, allowing you to enjoy a good work-life balance. In the beginning, it will require lots of hard work to establish a good client base and reputation. So it can be difficult in the beginning but the rewards will be well worth it.

Working for a brokerage means you won’t have to establish a client base on your own, as the company will likely have existing clients. You will also have a consistent income, providing you with more financial security. Your employer could also help with your education and development, to progress further in your career.

What are the different pathways within finance and mortgage broking?

There are a number of different pathways to (and within) the finance and mortgage broking area. For example, many brokers get their start as administrators or client service assistants.
If you’re looking to break into finance and mortgage broking or take the next step to become a broker, a Certificate IV in Finance and Mortgage Broking is a great start. It’s a minimum compulsory qualification to be an authorised representative of a licensee, but it’s also a great way to stand out of the crowd if you’re looking for adjacent roles.

Monarch’s Certificate IV in Finance and Mortgage Broking is ideal for independent learners ready to take the next step. The flexible, 100% online delivery is a great option for learners balancing existing work commitments. Trainer Shane Watson is an industry veteran with a passion for supporting and encouraging new entrants to the profession. Check out the course page and chat to a course consultant about your study options today.

If you have any questions, book a time here and we’ll call you https://drift.me/monarchinstitute/meeting.