Imagine waking up at 4.30am on a Saturday morning. You tip-toe around the house, careful not to wake your sleeping family, and log into your computer.
Your client, a FIFO truck driver who works the opposite of normal business hours, asks if he can move the meeting forward.
“Sure,” you say, knowing he is probably anxious about his first home purchase, and you had already written out the scenario the day before. “No problem.”
“This is but one of the countless examples of the dedication and flexibility required to be a mortgage broker,” said Niti Bhargava (pictured above), director of Resolve Finance Derrimut.
“While it’s certainly a hustle at times, I wouldn’t change it for the world.”
The life of a mortgage broker is sometimes painted in broad strokes: big commissions, standard hours, and pushing products that incentivise their own interests.
These “millionaire mortgage brokers” are ticking off boxes and getting rich, laughing their way to the banks and doubling over in tears, pointing at the poor old bankers once inside the branch – or so they say.
But the reality, as many brokers like Bhargava will tell you, is a far cry from that picture. It's a world of long hours, constant hustle, and the ever-present risk of unforeseen challenges.
"Many people assume brokers are rolling in dough," said Bhargava, "but the reality is, most of us are driving Camrys like me, not Mercedes."
It’s easy to see how a cursory glance could result in brokers seeming like rich, finance bros.
The average gross annual earnings, prior to costs, was $181,199 in the period between Oct. 1, 2022, and March 31, 2023, according to the latest MFAA data.
This was down 7.33% from the six-month period before where brokers earned - prior to costs – an eye-watering $195,356.
That is nearly double the annual wage of the average worker in Australia. Furthermore, the median wage in August 2022 was nearly a third of that figure, earning $65,000.
However, the important distinction with those figures is that it’s gross earnings – prior to costs.
“Overhead costs like marketing, software, insurance, rent, business insurance and salaries eat into revenue and the income isn't always steady,” Bhargava said.
“We are always sitting on the edge of another expense and it’s stressful.”
Clawbacks, where a portion of a commission is returned to the lender if the client refinances within a certain timeframe, add another layer of stress to the equation.
“Nowadays, we are very lucky if the client is staying for 24 months. There were so many cashbacks, rebates, and this and that,” Bhargava said.
“Clients are much more rate sensitive and it’s a focus of ours to retain our clients and offer constant value.”
This clawback of trail commission, which forms a significant part of a broker’s income, makes it especially hard for new entrants looking to start their own brokerage.
“It’s not only a hit to my cashflow, but if I had settled something last year, I had already paid taxes on that income. When that’s taken away, I can’t claim it as a business loss – it’s just lost income,” Bhargava said.
“So, it’s all about generating new clients while maintaining your relationships with your existing ones. And even if you do make it as a broker and you're financially well off and stable, the next step is staying there.
“We still must keep working hard. Regulations change. Events like the pandemic can happen. We can never rest on our laurels and congratulate ourselves. It’s a constant hustle.”
Another misconception about brokers is they run large operations.
Surely, brokers are in their pinstriped suits commanding high-stake meetings in their expansive offices?
The reality, again, is quite different.
According to the MFAA’s Industry Intelligence Survey, which sampled over 15,000 of the 19,000 brokers in the industry, 61% of all brokerages either have one or two brokers.
Only 12% of brokerages have 11 or more brokers.
Many also operate in regional areas, serving the homebuying needs of their local communities.
And while the stakes are still high – brokers are often tasked with financing their client’s biggest purchase of their life – the meetings happen in business casual clothes over Zoom or in a local coffee shop.
While Bhargava operates on the outskirts of Melbourne, she is now making her way as one of the mortgage industry’s many sole operators.
“I’m going through structural changes at the moment. I’m building my brand and building my team. After four years in the industry and I feel like a newbie again,” Bhargava said.
And that’s coming from a broker who is objectively highly successful – Bhargava has been recognised in 13 industry awards and has a significant focus on community engagement.
“I know a very experienced broker who has been in the industry for 25 years. Her business partner is leaving and she’s experiencing such anxiety at the moment as she goes through the motions of cash flows and acquiring new leads,” Bhargava said.
“It’s a constant challenge, full of highs and lows, just like any small business.”
While there are a small proportion of the industry that do make it big, writing $100 million-plus or even $1 billion worth of loans, Bhargava said scaling a business involves increased overhead and pressure.
“Even though brokers that are writing $100 million per year, you need to consider how many hours they have been working,” she said.
“What adjustments have they been making with their health and family time? Because they are driven, they devote time, money, and resources to care for that client. It’s not that easy.”
Despite the challenges, the rewards are profound. The ability to help people achieve homeownership, a lifelong dream for many, is a powerful motivator. "We're not just making money," said Bhargava, "we're making a difference in people's lives."
That sense of purpose, the satisfaction of guiding clients through a complex financial process, keeps many brokers going through the long hours and fierce competition.
Broking can also serve as a platform for delivering good beyond the role - Bhargava herself has developed a financial literacy program designed for migrant women.
Being a mortgage broker is a demanding career path, but for those with the grit, determination, and a genuine desire to help others, it can be a deeply rewarding one.
It's a profession built on hustle, resilience, and ultimately, the ability to make a positive impact on a person's future.
