Clawback Management and Client Retention

Key takeaways

• Clawback periods and scales are set by lender and aggregator agreements - read yours.
• Bridging, short-hold investors and imminent sales carry structural clawback risk.
• Retention contact after settlement is the main controllable factor.
• You cannot discourage a beneficial refinance to protect commission - best interests duty applies.

How does clawback actually work?

When a loan is discharged shortly after settlement, the lender reclaims some or all of the upfront commission it paid. Your aggregator then recovers it from you, usually by offsetting against future payments.

Most lenders apply a scale across roughly the first two years, with a higher proportion recovered in year one than in year two. The exact periods, percentages and triggers differ by lender, and they change. The only reliable source is your current aggregator schedule and the lender's own terms.

What triggers it also varies. A refinance to another lender almost always triggers clawback. A property sale usually does. An internal product switch, a partial repayment, or a discharge caused by the lender may or may not - and that detail is worth knowing before you place the loan.

Which loans carry the highest clawback risk?

Some risk is visible at application. Recognising it does not mean declining the business - it means pricing your expectations and managing the client properly.

The single best predictor is whether anyone from your business speaks to the client between settlement and the day a competitor calls them.

Where is the line between retention and self-interest?

Sharp and non-negotiable. Best interests duty means you cannot steer a client away from a better outcome because moving costs you commission, and you cannot present clawback as a reason for them not to refinance. Your clawback exposure is your commercial arrangement with your aggregator, not the client's problem.

What you can legitimately do is compete: contact them first, request repricing with the existing lender, explain the full cost of switching including discharge and establishment fees, and arrange the refinance yourself where a move is genuinely warranted. A refinance you write is a new upfront; a refinance a competitor writes is a clawback plus a lost trail.

Charging a client a fee to recover clawback is a different question again. Some brokers do it under a disclosed agreement; whether it is appropriate depends on the disclosure, the agreement and your licensee's position. Get advice before adopting it, because a poorly disclosed fee is a complaint waiting to happen.

Frequently asked questions

How long is the clawback period on a home loan?

Commonly around two years on a reducing scale, with a higher proportion recovered if the loan is discharged in the first year. Periods and percentages are set by each lender and your aggregator agreement, and they vary, so check the current schedule rather than relying on a rule of thumb.

Can a broker charge the client for clawback?

Some brokers do so under a disclosed written agreement, but whether it is appropriate depends on the disclosure, the terms and your licensee's policy. Get advice from your licensee before adopting it - inadequate disclosure creates a complaint and potentially a breach.

Does a property sale trigger clawback?

Usually yes, because the loan is discharged. Some lenders treat a sale differently from a refinance, so check the specific lender's terms. It is one reason to ask a client about their likely holding period before placing the loan.

Can I ask a client not to refinance so I avoid clawback?

No. Under best interests duty you must prioritise the client's interests over your own, which includes your commission exposure. If refinancing is right for them, the correct response is to arrange it yourself.

Related reading

• Broker Unit Economics: Revenue Per Deal
• Annual Review Calls as a Lead Engine
• Refinancing Your Home Loan: The Complete 2026 Process

Sources

• Review of mortgage broker remuneration — ASIC
• Mortgage brokers: Best interests duty (RG 273) — ASIC