Broker Unit Economics: Revenue Per Deal

Key takeaways

• Value trail as a present value, not a face amount - it arrives over years and is uncertain.
• Expected clawback is a cost of every deal, not an occasional accident.
• Contribution per settlement, times settlements, minus fixed costs, is your profit.
• Average loan size is the most underused lever in the model.

What is revenue per deal?

Two components with very different characters. Upfront commission is paid at settlement as a percentage of the loan amount, commonly net of offset in current structures. Trail is paid monthly on the outstanding balance for as long as the loan survives.

Commission rates vary by lender and aggregator, so use your own schedule rather than an industry average. What matters more than the rate is how you value trail: a stream paid over years, shrinking as the loan amortises, and terminating whenever the client refinances, sells or pays out.

Value it as a present value with an attrition assumption. A broker who books trail at face value is recording revenue that a meaningful share of clients will never generate.

How does the whole model fit together?

Illustrative structure - substitute your own commission schedule, attrition rate and costs. The purpose is the shape of the calculation.

Multiply contribution by settlements and subtract fixed costs - premises, software, licensing, non-acquisition staff - to get profit. That framing makes the strategic questions obvious: raise average loan size, raise settlements, or lower cost per deal.

Why is average loan size the strongest lever?

Because upfront and trail are both percentages of the loan, while cost per deal is broadly fixed per transaction. A larger loan costs about the same to write as a smaller one.

Move average loan size from $450,000 to $650,000 and revenue per deal rises by roughly 44% while cost per deal barely moves. No amount of marketing efficiency delivers that.

This is the concrete business case for niching. An investor, professional-package, SMSF or commercial niche shifts average loan size structurally - which is why specialists with fewer settlements frequently out-earn generalists with more.

Frequently asked questions

How much does a mortgage broker earn per loan?

It depends on your commission schedule, the lender, and the loan size, since both upfront and trail are percentages of the loan. Rather than an industry average, calculate your own revenue per deal from your aggregator schedule, then discount trail to present value and deduct expected clawback.

How should I value trail commission?

As a present value: project the monthly stream on an amortising balance, apply an attrition assumption for refinances and sales, and discount it. Booking trail at face value overstates the value of every deal you write.

Is clawback a cost or a risk?

Both, but model it as a cost. If a predictable share of loans are repaid inside the clawback period, the expected clawback is a recurring expense of doing business and belongs in revenue per deal.

What fixed costs should sit outside contribution per settlement?

Costs that do not vary with the next settlement - premises, licensing and aggregator fees, core software, and administrative staff whose workload does not scale with volume. Anything that scales with deals belongs in cost per deal.

Related reading

• Cost Per Funded Deal: The Metro Broker Maths
• 16,000 Brokers, One Borrower Pool
• Privacy and Consent in Broker Lead Capture

Sources

• Review of mortgage broker remuneration — ASIC
• Quarterly mortgage broker market share reporting — MFAA