Mortgage Broker Commission Rates and Terms 2026

Mortgage broker commission is an upfront payment of about 0.65% to 0.70% of the drawn loan, plus trail commission of about 0.15% a year, both paid by the lender. Those are the ranges in the Mortgage & Finance Association of Australia (MFAA) broker remuneration factsheet, as at October 2026. Under this commission structure, both rates apply to the loan balance less any money in the borrower’s offset account.

The published rate is not what lands in your account, because the lender pays your aggregator, which may keep a share before paying you. Goods and services tax (GST) is then added on top. On the fictional $600,000 loan in this guide, a 0.65% upfront rate becomes $3,203.20 in the brokerage’s account, GST included, about nine weeks after settlement.

Separate Upfront and Trail Commission

Upfront commission is a one-off payment the lender makes after a loan settles, while trail commission is a smaller monthly payment for as long as the loan stays open. As at October 2026, the MFAA describes upfront commission as paid before the lender has earned interest and fees on the loan. It describes trail as a share of that return as the lender receives it.

Each component becomes payable at a different point. Upfront commission is earned at settlement, but the MFAA says it can take up to 90 days after settlement to reach the broker. Trail is calculated each month on the balance at the lender’s balance date and keeps paying while the loan isn’t in default or more than 90 days in arrears.

Monthly trail reconciliation needs its own process, which the trail commission guide covers. The example below follows trail only to its first full month.

A Fictional Settled Loan

In this fictional example, you settle a $600,000 owner-occupied loan on 14 July 2026. The borrower draws the full $600,000 and holds $40,000 in an offset account at settlement. The lender pays 0.65% upfront and 0.15% a year in trail, both excluding GST.

Your aggregator passes on 80% of upfront commission and 95% of trail. Those splits match the lowest volume band of Connective’s Variable Plan, with fees effective 1 November 2023. The aggregator and your brokerage are both registered for GST, so 10% GST is added to each payment.

Date	What happens	Amount
14 July 2026	Settlement date: the borrower draws the loan	Commission basis of $560,000 ($600,000 drawn less $40,000 in offset)
31 August 2026	Lender’s upfront payment run to the aggregator	$3,640.00 plus $364.00 GST
31 August 2026	Eligible balance date for the first full month of trail	$553,200 ($598,200 balance less $45,000 in offset)
15 September 2026	Aggregator pays upfront commission to your brokerage	$2,912.00 plus $291.20 GST, so $3,203.20
30 September 2026	Lender pays August trail to the aggregator	$69.15 plus $6.92 GST
15 October 2026	Aggregator pays August trail to your brokerage	$65.69 plus $6.57 GST, so $72.26

If you check your account at the end of August, you’ll see no upfront payment, although the loan settled seven weeks earlier. The gap comes from timing. The settlement date, the eligible balance date and the payment date are three different dates, and every statement line belongs to one of them.

How Much Commission a Broker Receives

From this fictional loan, your brokerage receives $3,203.20 upfront, including $291.20 GST, and $72.26 in trail for the first full month. The table traces each amount from the lender’s rate to the cash received.

Step	Upfront commission	First full month of trail	Basis
Commission basis	$560,000	$553,200	Drawn balance less offset
Lender’s rate, excluding GST	0.65%	0.15% a year, divided by 12	Lender’s commission schedule
Gross commission paid by the lender	$3,640.00	$69.15	Basis multiplied by rate
Aggregator’s share	$728.00 (20%)	$3.46 (5%)	Aggregator split
Your commission, excluding GST	$2,912.00	$65.69	80% of upfront and 95% of trail
GST added	$291.20	$6.57	10% of your commission
Cash received by your brokerage	$3,203.20	$72.26	Paid 15 September and 15 October 2026

None of these amounts is take-home income. You pay the $291.20 GST to the Australian Taxation Office (ATO) through your business activity statement. As at October 2026, the MFAA lists the costs commission covers before a broker is paid, including aggregator fees, staff, regulatory levies, software, insurance, rent and tax.

So no single average commission tells you what a mortgage broker makes from a loan. The lender’s rate, the offset balance, the aggregator plan and the brokerage’s costs each change the result for the same loan size.

Follow the Payment

The lender pays both commission components, but the money reaches you through your aggregator under two separate agreements. The Australian Securities and Investments Commission (ASIC) Report 516, published in March 2017, found that lenders generally pay commission to aggregators rather than to brokers. The aggregator then passes commission on to the broker business or the individual broker.

Component	Payer	Contractual entitlement	Event that triggers it
Upfront commission	The lender pays the aggregator, which pays your brokerage	The lender’s commission terms with the aggregator, then your agreement with the aggregator	Settlement, on the amount drawn less offset
Trail commission	The same chain each month	The same two agreements, while the loan is open, not in default and no more than 90 days in arrears	Each monthly balance date after settlement

Settlement is the event that creates the upfront entitlement. As at October 2026, the MFAA says brokers receive commission only after the client’s loan settles. An approval or a signed contract of sale earns nothing until the borrower draws the funds.

This lender-paid commission is how mortgage brokers usually make money from a home loan. Moneysmart’s mortgage broker guide, updated 4 September 2026, says lenders generally pay brokers a commission, so the client doesn’t pay them directly. A broker who also charges the client a fee must set it out in a written quote the client signs, which the mortgage broker fees guide explains.

Read the Commission Rate Basis

The commission rate applies to an eligible balance, which is the amount drawn less money in the borrower’s offset account. The MFAA factsheet sets out this basis for both upfront and trail commission, as at October 2026. An undrawn limit and offset funds are excluded, so a $600,000 loan with $40,000 in offset earns upfront commission on $560,000.

What Changes the Net Payment

Offset balances keep moving after settlement. Trail is paid on the outstanding balance less offset, so a borrower who builds offset savings lowers your trail each month. The loan limit stays the same throughout.

Arrears can stop trail altogether. Under the MFAA’s description, trail isn’t paid while a loan is in default or more than 90 days in arrears.

Later loan changes move the balance that trail is calculated on. Repayments lower it, an increase raises it and a split divides it across loan accounts. The lender’s commission schedule says whether a loan increase earns new upfront commission and on what amount.

GST sits outside the rate. The MFAA’s own example quotes 0.65% excluding GST, and 10% GST is added to each payment when the aggregator and your brokerage are registered for GST. The ATO’s GST registration page, updated 14 September 2026, requires a business to register once its GST turnover reaches $75,000.

Check that each statement shows commission and GST as separate amounts. A remittance can also carry reversals, corrections and clawbacks alongside new commission. The broker clawback guide covers when a lender recovers upfront commission.

Aggregator Splits

ASIC’s March 2017 Report 516 found two ways aggregators charge brokers. Some keep a percentage of each commission and pass on the rest, while others charge a periodic fee and pass on all of it.

In the term sheets ASIC reviewed, aggregators usually passed on around 80% or more of upfront commission. On ASIC’s figures, broker businesses received an average of 0.54% upfront and 0.14% trail after the aggregator’s share, from typical lender rates of 0.62% and 0.18%.

Connective’s pricing, with fees effective 1 November 2023, shows both models. Its flat monthly fee plan passes on 100% of commission, while its split plan passes on 80% to 95% of upfront commission by volume band. The aggregator fees guide compares these models.

When the Rate and the Remittance Disagree

The lender’s commission schedule and your aggregator agreement decide which amount is right. The schedule sets the rate and the eligible balance, and the agreement sets the split and any fees taken from commission. The remittance statement shows the balance, date and rate that were applied, so compare it line by line with those two documents.

Work Through a Statement

To reconcile the published rate to the amount received, start from the rate and apply each step in the order the money moved. In this fictional settlement, you expected 0.65% of the $600,000 loan, which is $3,900. Your aggregator statement shows $3,203.20.

Step	Amount	What explains it
Your expectation: 0.65% of the $600,000 loan limit	$3,900.00	The advertised rate applied to the full loan
Less 0.65% of the $40,000 offset balance at settlement	-$260.00	Commission is calculated on the drawn amount less offset
Gross upfront commission paid by the lender	$3,640.00	Matches the lender’s line on the aggregator statement
Less the aggregator’s 20% share	-$728.00	Your plan’s 80% upfront split
Your commission, excluding GST	$2,912.00	The amount you earn as revenue
Plus 10% GST	$291.20	Collected for the ATO
Amount received on 15 September 2026	$3,203.20	Equal to 0.53% of the loan including GST, or 0.49% excluding GST

When a line still doesn’t match, check these causes in order.

1. Check the payment date. The upfront payment can fall in a later payment run, up to 90 days after settlement under the MFAA’s October 2026 description.
2. Confirm the drawn amount and the offset balance on the lender’s calculation date.
3. Compare the rate with the lender’s current commission schedule for that product.
4. Confirm the aggregator plan and volume band that applied to that period.
5. Check whether the statement amount includes GST.

A difference that remains after these checks is a query for your aggregator. Send the loan number, the settlement date, the line you expected and the line you received.

Recognise Later Changes

After the upfront payment, the commission on a loan keeps changing with its balance. Trail adjustments and clawbacks each have their own reconciliation guide.

• The trail commission guide covers monthly trail entitlement and how to match each trail payment to the loan balance.
• The broker clawback guide covers the recovery of upfront commission when a loan is discharged early.

Commission also has to be on the client file before you recommend a lender. ASIC’s RG 273, issued 24 June 2020, explains the best interests duty and the conflict priority rule. Under that rule, you must put the client’s interests first when your interests conflict with theirs.

1. Give the client the commission information the law requires. As at October 2026, the MFAA factsheet says that includes how your commission is structured and its percentage. The credit guide article covers where that information appears.
2. Record the upfront and trail rates of each lender you shortlist, plus any other benefit to you, your licensee or a related party.
3. Record the client’s needs and objectives and the reasons your recommended loan meets them.
4. Where the recommended lender pays you more, record why that loan is still in the client’s best interests.

Disclosure alone doesn’t satisfy the conflict priority rule. RG 273 says you can’t comply merely by disclosing a conflict or getting the client’s consent to it. Recommending a loan with a higher interest rate than comparable alternatives because of its commission breaches the rule.

The commission a lender pays tells you nothing about which loan suits the client. In ASIC’s example, recommending the best loan is fine when that lender also pays more. Recommending a loan with a $149 annual fee because its lender paid more would be inconsistent with the rule.

Record the policy reason for each lender choice beside the commission note. Bulma’s Policy Advisor quotes the lender’s policy wording behind each answer, and you can copy that wording into the file note. Keep the file note with the lender’s commission schedule and each remittance, so the client’s file and your income records tell the same story.