1. High demand for mortgage brokers
One of the primary reasons to consider a career in mortgage broking is the high demand for brokers in Australia. With an increasing number of Australians buying homes or refinancing their existing loans, the demand for mortgage brokers has also risen significantly. According to the Mortgage & Finance Association of Australia (MFAA) Mortgage Brokers are responsible for approximately 70% of mortgages written in Australia.
2. Attractive income potential
Mortgage brokers in Australia have a high income potential. A recent survey by the MFAA showed that the average mortgage broker earns around $86,000 annually, with top brokers earning over $200,000 per annum.
With the right skills and experience, there is no limit to how much a broker can earn in this industry.
3. A flexible work schedule
Mortgage broking offers a flexible work schedule that allows brokers to balance their work and personal life. With the ability to work from home or choose their own hours, mortgage brokers can enjoy a healthy work-life balance. This flexibility also allows brokers to cater to clients at different times of the day, including after-hours and weekends.
4. Opportunities for growth and development
The mortgage broking industry is constantly evolving, providing ample opportunities for brokers to develop their skills and knowledge. With new products and lending regulations introduced regularly, mortgage brokers need to stay up-to-date with the latest industry trends to serve their clients better. This industry offers various training and development programs that can help brokers gain new skills and remain competitive in the market.
5. Helping clients achieve their dreams
Mortgage broking is a rewarding industry that helps people achieve their dreams of homeownership.
As a mortgage broker, you will work closely with clients, providing them with the guidance they need to secure the right home loan. This can be an incredibly fulfilling experience, knowing that you have helped someone achieve a significant milestone in their life.
In addition to the attractive income potential mentioned earlier, it’s important to understand how mortgage brokers earn their income. Brokers primarily generate revenue through upfront commissions and trails.
1. Upfront commissions: When a mortgage broker successfully helps a client secure a loan, they receive an upfront commission from the lender. This commission is typically calculated as a percentage of the loan amount and can vary depending on the lender and the loan product. The upfront commission is paid to the broker upon settlement of the loan and serves as a significant source of income for brokers.
2. Trails: In addition to upfront commissions, mortgage brokers also earn ongoing trails. Trails are smaller, recurring commissions that brokers receive throughout the life of the loan. These commissions are typically a percentage of the outstanding loan balance and are paid to the broker on a monthly or annual basis. Trails provide brokers with a steady stream of income as long as the loan remains active.
It’s important to note that the commissions and trails earned by mortgage brokers are paid by the lenders and not by the borrowers. This means that clients seeking the services of a mortgage broker do not have to pay any upfront fees or additional charges for the broker’s services.
The income earned by mortgage brokers can vary depending on several factors, including the number of clients they serve, the loan size, the types of loans they specialize in, and their overall business performance.
Brokers who build a strong reputation and a loyal client base can significantly increase their income over time.
It’s worth mentioning that regulatory changes have been implemented in recent years to ensure transparency and align the interests of brokers with their clients. These changes include the introduction of the Best Interest Duty (BID) obligations, which require brokers to act in the best interests of their clients when recommending loan products. These measures aim to enhance consumer protection and maintain the integrity of the mortgage broking industry.
In conclusion, mortgage broking is an excellent industry to enter. With high demand, attractive income potential, a flexible work schedule, opportunities for growth and development, and the opportunity to help clients achieve their dreams, this industry offers numerous benefits. Whether you are just starting your career or looking to switch careers, mortgage broking could be an excellent opportunity for you.