How does a Broker get paid?
In most cases, a mortgage broker earns a one-time commission from the lender known as the ‘Upfront Commission’. The amount can vary from 0.50% to about 1%, depending on the type of mortgage they sell and what the lender is offering. If you sign a $300,000 mortgage, your broker would earn about $1,800, based on a commission of 0.60%.
Brokers can also receive recurring commission also known as ‘trailing commission’. This payment is a recurring commission that is calculated based on the remaining loan amount each year, which is paid to them on a monthly basis. While some lenders offer no ongoing commission, others offer an ongoing commission of 0.1-0.2% based on the remaining balance of the loan.