How Do Mortgage Loan Officers Get Paid?

If you’re considering a career in mortgage lending, you may be wondering how loan officers get paid. In this blog post, we’ll explain how commission works in the industry.

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Mortgage Loan Officer Basics

Mortgage loan officers typically get paid 1% of the loan amount at closing. So, if you’re borrowing $200,000, the loan officer will make $2,000. Some lenders also pay loan officers a base salary plus commission, while others may offer only commission. Some loan officers also receive a bonus for meeting certain production goals, such as closing a certain number of loans per month.

Define a Mortgage Loan Officer

A mortgage loan officer is a professional who can guide you through the often confusing process of applying for and securing a home loan. A good mortgage loan officer will take the time to listen to your needs and match you with the right loan product. They will also be available to answer any questions you have throughout the life of your loan.

Though mortgage loan officers are not required to be licensed in all states, most are licensed by the Nationwide Mortgage Licensing System and Registry (NMLS). To become licensed, mortgage loan officers must complete 20 hours of pre-licensing education, pass a background check and exam, and submit to ongoing continuing education requirements.

The Different Ways Mortgage Loan Officers Get Paid

Mortgage loan officers can get paid in several different ways. Some banks and credit unions are salary-based, while others offer commission-based pay structures. Some institutions may offer a mix of the two.

Loan officers who work on salary typically earn a set amount per year, no matter how many loans they originate. This type of arrangement is more common at credit unions, as well as at smaller banks.Bigger banks and mortgage companies often structure their loan officer compensation around commission. The amount of the commission can vary based on the type of loan being originated, as well as the price of the home. In general, though, loan officers can expect to earn a commission equal to 1% of the loan amount.

In some cases, loan officers may be paid a lower commission but also given bonuses based on their production levels. And some institutions may offer Draw Against Commission (DAC) programs. This type of program allows loan officers to draw a portion of their expected commissions in advance, giving them a regular paycheck even if they haven’t yet closed any loans.

It’s important to remember that regardless of how a loan officer is compensated, he or she is still bound by law to act in the best interest of the borrower – not in their own best interest!


The median annual salary for a Mortgage Loan Officer is $64,660, as of May 2016. The top 10 percent of earners make more than $136,180, while the bottom 10 percent earn less than $28,290. The best-paid 25 percent made $85,660 that year, while the lowest-paid 25 percent made $47,660.

Base Salary

Loan officers typically get paid 1% of the total loan amount for each loan they originate. So, on a $250,000 loan, a loan officer would make $2,500. This may be paid to the loan officer up front as a commission, or it may be paid at closing out of the borrower’s funds. Some lenders pay a base salary plus a production bonus; in that case, the income may vary depending on how many loans are closed.


In addition to a base salary, loan officers may receive bonuses based on the volume of loans they originate. According to a May 2013 report from Quicken Loans, these bonuses can range from 0.25% to 2% of the total loan amount. For example, on a $200,000 mortgage, a loan officer could earn a $2,000 bonus (1% of the loan amount). Some loan officers also receive discounts on origination fees.


Mortgage loan officers typically get paid a commission, which is a percentage of the loan amount. The commission is usually paid by the lender, and the amount can vary based on the type of loan, the loan amount, and the borrower’s creditworthiness. Some loan officers also receive a salary, which can vary based on experience and location.

How Commission is Earned

Commission is earned when a loan officer helps a borrower obtain a loan from a lender. The loan officer’s commission is based on the interest rate of the loan and the amount of the loan. The higher the interest rate, the higher the commission. The larger the loan, the higher the commission.

Most mortgage loan officers are paid a base salary plus commission. The base salary is typically a small amount, and the commission makes up the majority of their earnings. For example, a mortgage loan officer who is paid a base salary of $2,000 per month plus 2% commission on all loans would earn $4,000 in commission on a $200,000 loan with a 5% interest rate.

Types of Commission

There are generally two types of commission that a mortgage loan officer can earn. The first is a draw against future commissions, and the second is 100% commission.

A draw against future commissions is the most common type of compensation for loan officers. In this case, the loan officer will receive a salary or an hourly wage plus a percentage of the commissions they generate. For example, if a loan officer is paid 50% commission on the loans they originate, they will receive 50% of the total commission paid by the lender at closing.

The other type of compensation structure for loan officers is 100% commission. In this case, the loan officer does not receive a salary or an hourly wage. Instead, they are only paid commissions on the loans they originate. This type of compensation structure is less common, but it can be more profitable for loan officers who are able to generate a large volume of loans.


Most mortgage loan officers are paid a combination of salary and commission. Some may receive a salary only, while others may receive a higher commission rate with a lower salary, or vice versa. There are many different ways that mortgage loan officers can be paid, and the best way for you will depend on your specific situation.

Base Salary Plus Commission

Mortgage loan officers typically get paid a base salary plus commission for each loan they origi-nate. In addition, some banks offer bonuses and other incentives based on production levels. In general, mortgage loan officers are paid more at larger banks and mortgage companies, and they may have the opportunity to earn more in production-based incentives. Some small banks and credit unions may pay a straight commission with no base salary.

Commission Based on Salary

A commission-based salary for a mortgage loan officer means that the loan officer’s income is based on a percentage of the loan amount. For example, if a loan officer originates a $200,000 mortgage, they may earn a 3% commission on that loan, which would equate to $6,000.

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