Mortgage brokers are licensed professionals who connect borrowers with lenders but do not issue mortgages themselves. For each deal they arrange, they typically receive a payment that equals 1% to 2% of the loan amount from either the borrower or the lender. This article looks at the latest available data on how much mortgage brokers can earn.
- Mortgage brokers are licensed mortgage loan originators who match borrowers with mortgage lenders.
- A mortgage broker is typically compensated 1% to 2% of a mortgage. This fee is paid by either the borrower or the lender but not both.
- The salary of a mortgage broker depends on their location and experience and can vary.
What Is a Mortgage Broker?
Mortgage brokers are licensed mortgage loan originators who work with multiple lenders to find mortgages for their clients. They differ from mortgage loan officers who work for a single lender, such as a bank or credit union, and are limited to offering that lender's mortgage products.
Prospective borrowers often choose to work with a mortgage broker rather than a loan officer in hopes of getting the best possible interest rate or if they have other issues that might affect their loan application, such as a less-than-perfect credit history.
Borrowers can use mortgage brokers both for their initial mortgages and for refinancing with a new loan.
How Are Mortgage Brokers Paid?
Mortgage brokers typically receive an amount equal to 1% to 2% of each loan they arrange. In some cases, they are paid by the borrower and in other cases, the lender. Under current law, they are not allowed to be paid by both the borrower and the lender.
So, for every $100,000 of the loan amount, the broker can expect to receive $1,000 to $2,000. With home loans averaging $414,114 in November 2021, for example, a broker could earn $4,141 to $8,282 on an average deal.
A mortgage broker might be a solo practitioner or work for a firm with multiple brokers. Brokers who are employees may be paid a salary and split their commissions with their parent firm.
When the borrower is responsible for paying the mortgage broker, that amount may either be added to the loan or paid at the closing.
How Much Do Mortgage Brokers Make?
How much money a mortgage broker is likely to earn over the course of a year will vary according to where they work and how much business they do. Since they're often paid a percentage based on the amount of the mortgage, areas where home prices are high, and homebuyers need larger loans to afford them, will be more lucrative for mortgage brokers than areas where home prices and mortgages are more modest. A well-connected and enterprising mortgage broker who does a lot of deals will make more than one who is just starting out or working at it part-time.
Online job sites and other resources list a range of average earnings for salaried mortgage brokers:
- Indeed says that based on 82 salary reports it has received, mortgage brokers nationally earn an average base salary of $77,731 per year, with some receiving commissions as an added benefit. In some areas, the amount was considerably higher: $117,636 in New York City, for example. But it's worth noting that the sample sizes were small, with a total of just three brokers in the case of New York City.
- PayScale puts the average salary of mortgage brokers at $58,304, based on 72 reports, and notes commissions ranging from $12,000 to $178,000. Brokers with less than one year of experience earned average total compensation of $46,750, it says, while those with at least 20 years of experience averaged $68,784. Again, these figures are based on small sample sizes.
- Glassdoor shows an average base salary for mortgage brokers of $63,469 and a range from $27,000 on the low end to $149,000 at the high end. It doesn't report any data on additional compensation, such as commissions. Glassdoor's estimates are based on reports from a total of 32 brokers.
- Finally, ZipRecruiter reports a national average mortgage broker salary of $77,202, with a range from $20,000 to $152,000.
Do Mortgage Brokers Make More Than Loan Officers?
While their incomes can vary widely by experience, the available data indicate that mortgage brokers tend to earn more, on average, than mortgage loan officers. For example, PayScale reports an average base salary of $49,369 for mortgage loan officers vs. $58,304 for brokers. Similarly, Glassdoor reports an average base salary of $43,241 for mortgage loan officers vs. $63,469 for brokers.
In many cases, mortgage brokers may have begun their careers as loan officers but later broke off on their own for the opportunity to earn a higher income or enjoy greater independence.
Do Mortgage Brokers Need a License?
Yes. Mortgage brokers are regulated under the federal SAFE Mortgage Licensing Act of 2008 and are licensed by the states. To obtain a license, they must complete a list of required courses and pass an exam. Once licensed, they must also take continuing education courses each year.
How Can I Make Sure a Mortgage Broker Is Legitimate?
The official Nationwide Multistate Licensing System, which maintains records for state agencies, has an online search tool, Consumer Access, that will tell you whether a mortgage broker is properly licensed and also whether there have been any disciplinary actions against them.
How Can I Find a Mortgage Broker?
To find a mortgage broker, it's usually best to ask for recommendations, such as from a local real estate agent, lawyer, accountant, or neighbor who has recently used a broker. You can also find lists of brokers online.
The Bottom Line
Mortgage brokers do not issue loans but act as intermediaries between lenders and borrowers. Unlike loan officers, who are employed by a specific lender, mortgage brokers work with multiple lenders. Mortgage brokers tend to earn higher salaries than loan officers, although that varies by location and years of experience.