What Does Mortgage Loan Officer Commission Actually Look Like?

If you are considering a mortgage career, you have probably heard that MLOs can earn great money. That is true — but the way that money reaches your bank account works differently than a typical salaried job.

MLO Earnings at a Glance

According to the U.S. Bureau of Labor Statistics (BLS)Business And Financial Loan Officers.htm Ooh, here is what loan officers earn nationally:

Metric	Amount (BLS, May 2024)
Median Annual Wage	$74,180
Top 10% Earned More Than	$145,780
Bottom 10% Earned Less Than	$38,490
Projected Annual Openings	~20,300 per year (2024–2034)

The wide range reflects the performance-based nature of the role. The more loans you close, the more you earn.

Two Main Compensation Models

The structure varies by employer type:

• Salary + bonus (banks and credit unions): A base salary provides predictable income, with a per-loan bonus or modest commission rate on top. Benefits like health insurance and retirement plans are usually included. Per-loan earnings tend to be lower than at commission-heavy firms.
• Commission-based (brokerages and independents): The company earns a fee on each loan, and you receive a percentage based on your negotiated split. Commission rates generally range from 0.5% to 2.5% of the loan amount. The most common benchmark is around 1% of the total loan going to the brokerage, with the MLO receiving their share of that fee.

Understanding Basis Points

Some companies express commission in basis points (bps) rather than percentages. Here is how they convert:

Basis Points	Percentage	Commission on a $350,000 Loan
50 bps	0.50%	$1,750
75 bps	0.75%	$2,625
100 bps	1.00%	$3,500
125 bps	1.25%	$4,375

One basis point equals one-hundredth of a percent (0.01%). These numbers represent what the brokerage earns — the MLO then receives their negotiated split of that amount. Understanding these numbers helps you plan your first yearPre License Strategic Moves For A Profitable First Year As A Mlo Resources with realistic financial targets.

Borrower-Paid vs. Lender-Paid Compensation

MLO commission comes from one of two sources — never both on the same transaction. This is a federal requirement under Regulation ZFinal Rules Loan Originator Compensation Requirements Under The Truth In Lending Act Regulation Z Rules Policy, enforced by the Consumer Financial Protection Bureau.

• Borrower-paid: The originator's fee is disclosed as part of closing costs. The borrower pays out of pocket or rolls it into the loan.
• Lender-paid: The wholesale lender pays the brokerage based on the interest rate. The borrower does not see a separate originator fee on their closing disclosure.

Either way, the MLO receives the same compensation regardless of which model the company uses.

What Federal Law Says About MLO Pay

The SAFE ActSlr Pages Default.aspx Mortgage.nationwidelicensingsystem.org and the Dodd-Frank Wall Street Reform Act established clear rules about how MLOs can and cannot be compensated:

• Prohibited: Commission based on loan terms or conditions (interest rate, loan type, term length). This prevents steering borrowers toward more expensive products.
• Allowed: Commission based on loan volume. Companies can create tiered structures where your split increases as you close more loans.

Your pre-licensing educationPre License Understanding Pre Licensing And Continuing Education Requirements For Mortgage Careers Resources covers these regulations in depth because compliance is a core part of practicing as an MLO.

What New MLOs Realistically Earn

Your first year is a ramp-up period. Most new MLOs do not close their first loan in week one. It takes time to build a pipeline, learn systems, and develop confidence. Many employers provide income support during this period:

• A base salary during training
• A draw against future commissions
• A training stipend for a set number of months

The BLS data showing the bottom 10% earning less than $38,490 reflects new MLOs, part-time originators, and low-volume markets. Understanding what drives successPre License How Mortgage Loan Originators Thrive In A Competitive Market Resources helps you accelerate through the early learning curve.

How Pay Grows Over Time

One of the most attractive aspects of an MLO career is that earning potential grows with your experience and reputation:

• Referral network: As you build relationships with real estate agents, financial advisors, and past clients, more business comes to you organically
• Higher splits: Experienced MLOs negotiate better commission rates as volume increases
• Management roles: Branch leadership adds override commissions on team production
• Specialization: Expertise in FHA, VA, or non-QM loans lets you serve underserved markets with less competition

The career paths availablePre License What Career Options Open Up After Getting Your Mortgage License Resources after licensing extend well beyond individual production.

Build the Skills That Pay

Understanding how MLO compensation works is the first step toward making informed career decisions. The next step is getting licensed and putting yourself in a position to earn. Aceable Mortgage's pre-licensing courses prepare you with the regulatory knowledge, product understanding, and real-world skills that employers value. Explore what an MLO career offersPre License Why Become A Mortgage Loan Originator Resources and start building toward a future where your effort directly determines your income.