A mortgage loan officer (MLO) plays a crucial role in helping homebuyers secure financing. Their income depends on commission structures, loan amounts, and employer policies. Many people wonder how much a mortgage loan officer makes per loan, as their earnings can vary significantly.
Key Points:
- Mortgage loan officers earn between 0.5% and 2% of the loan amount as commission.
- They can work on a salary, commission, or a combination of both.
- Income depends on experience, employer, and loan volume.
1. What Is the Typical Commission for a Mortgage Loan Officer?
Mortgage loan officers are usually paid a percentage of the loan amount. The standard commission rate ranges from 0.5% to 2%. If a loan officer closes a $300,000 loan at a 1% commission, their earnings would be $3,000. However, this amount is often split with their employer.
For example, if the company keeps 20% of the commission, the loan officer takes home $2,400. The percentage they retain depends on their agreement with the employer.
| Loan Amount | Commission Rate | Total Commission | Loan Officer’s Take (80%) |
| $200,000 | 1% | $2,000 | $1,600 |
| $500,000 | 1.5% | $7,500 | $6,000 |
| $750,000 | 2% | $15,000 | $12,000 |
2. Do Mortgage Loan Officers Earn a Salary or Only Commission?
Mortgage loan officers may receive compensation in three different ways:
- Commission-Only – Some MLOs work on 100% commission, meaning they get paid only when they close a loan.
- Salary + Commission – Many banks and financial institutions offer a base salary along with commission incentives.
- Flat Salary – Some institutions provide a fixed salary without commission. However, this is less common in mortgage lending.
For instance, a bank-employed loan officer might earn a $50,000 base salary plus a 0.5% commission per loan. This provides a steady income with the opportunity to increase earnings.
3. How Does Experience Affect Mortgage Loan Officer Earnings?
Experience plays a huge role in determining how much a mortgage loan officer makes. A beginner MLO might start with 0.5% commission rates, while seasoned professionals can negotiate up to 2%.
Comparison of Earnings by Experience:
| Experience Level | Average Annual Income |
| Entry-Level (0-2 years) | $45,000 – $70,000 |
| Mid-Level (3-7 years) | $80,000 – $120,000 |
| Senior-Level (8+ years) | $150,000 – $250,000 |
Note: Experienced MLOs often have repeat clients and referrals, increasing their earning potential.
4. Do Loan Types Affect How Much MLOs Earn?
Yes, loan types impact commission rates. Certain loans have higher fees and commission structures.
- Conventional Loans: Usually offer 1% commission.
- Jumbo Loans: Larger amounts lead to higher commissions, often up to 2%.
- FHA & VA Loans: Typically lower commission due to government restrictions.
For example, an MLO closing a $750,000 jumbo loan at 2% makes $15,000, while a $200,000 FHA loan at 0.8% earns them $1,600.
5. Do Mortgage Brokers Earn More Than Loan Officers?
Mortgage brokers tend to earn more because they have direct relationships with multiple lenders. Brokers set their fees, while loan officers work under a bank or mortgage company.
- Loan Officers: Earn 0.5% to 2% commission but must split with their employer.
- Mortgage Brokers: Charge origination fees (often 1% to 3%), keeping more of the profits.
6. What Bonuses and Incentives Do Loan Officers Receive?
Many companies offer bonuses for closing multiple loans or reaching certain sales targets. For example:
- Volume Bonus: Closing $5 million in loans per quarter might earn an extra $10,000.
- Referral Bonus: Bringing in new clients can provide extra commission.
- Annual Performance Bonus: High-performing loan officers may receive 5% of their yearly commission as a bonus.
7. How Can Loan Officers Increase Their Earnings?
- Build a Strong Network: More referrals mean more deals.
- Work with High-Value Clients: Jumbo loans lead to higher commissions.
- Improve Sales Skills: Stronger negotiation skills result in better deals.
- Choose the Right Employer: Some companies offer better commission splits.
8. What Are the Biggest Challenges in Earning as a Loan Officer?
- Market Fluctuations: Interest rates impact loan demand.
- Strict Regulations: Compliance rules can affect commission structures.
- High Competition: Success requires strong marketing and networking skills.
Note: A slow housing market can significantly reduce an MLO’s income.
9. Is Being a Mortgage Loan Officer a Good Career Choice?
It depends on the individual. Those who enjoy sales and networking can thrive in this career. While commission-based pay can be risky, experienced MLOs can earn six-figure incomes.
Pros:
- High earning potential
- Flexible schedule
- Opportunity for career growth
Cons:
- Unstable income
- Requires strong sales skills
- Compliance and paperwork-heavy
10. Can Mortgage Loan Officers Work Remotely?
Yes, many MLOs now work remotely. Online applications and digital tools make it easier to close loans without meeting clients in person. However, networking and relationship-building remain crucial for success.
Conclusion
Mortgage loan officers earn based on commission, with rates typically between 0.5% and 2% per loan. Earnings depend on experience, employer, loan types, and market conditions. Those who build strong client relationships and work with high-value loans can earn six figures annually.
A successful MLO understands the industry, maximizes commissions, and provides excellent customer service. Whether working on commission, salary, or a combination, this career can be highly rewarding with the right strategy.
FAQ’s
How much does a loan officer make per $300,000 loan?
If the commission is 1%, they make $3,000, but they may take home less after a brokerage split.
Is it hard to become a mortgage loan officer?
While no degree is required, passing the licensing exam and developing sales skills is essential.
Do mortgage loan officers get paid if a loan is denied?
No, MLOs typically earn only when a loan closes.
Can loan officers earn over $200,000 per year?
Yes, experienced officers closing high-value loans can earn well above $200,000 annually.
What is the best way to start as a mortgage loan officer?
Gain a license, join a reputable company, and build a strong referral network.