Definitions for the most-used terms in Australian mortgage broker portfolio management. Linked from feature copy across the site.
Trail commission
An ongoing monthly commission paid by a lender to a mortgage broker for the life of a settled loan. Rates are typically 0.15% per year of the outstanding loan balance, paid monthly (~1.25 basis points per month). As the loan amortises, the monthly trail payment slowly declines. Trail is the broker's recurring book income — separate from upfront commission paid at settlement.
Upfront commission
A one-off commission paid by a lender to a mortgage broker when a loan settles, typically 0.55–0.715% of the loan amount including GST. The amount varies per lender and per product. Upfront covers the broker's origination work; trail is the ongoing service fee. Australian best-interests duty rules limit how upfront/trail mix can be marketed to clients.
Clawback
A lender's recovery of all or part of the upfront commission if a loan is discharged or refinanced within a defined window after settlement — usually 12, 18 or 24 months. The longer the loan stays on book, the smaller the clawback. The lender clawback schedule lists the rate for 54 lenders in eight three-month bands, and the clawback calculator turns a lender, an upfront and a discharge month into a dollar figure. Clawback is the single largest revenue risk in a trail book.
Clawback period
The number of months from settlement during which a lender can recover upfront commission if the loan is discharged. Most Australian lenders run a 24-month clawback. Some major banks run 18 months for fixed-rate loans. Loans that discharge inside the clawback period generate a recovery against the broker; loans that survive past it convert to clean trail revenue.
Retention score
A composite, broker-tool-defined score (TrailScope uses one) estimating how likely a client is to discharge, refinance or otherwise leave the book in the near term. TrailScope's score weights eight factors: settlement age, fixed-rate proximity, rate-vs-market gap, loan size, equity, engagement recency, repayment anomaly and tenure. Used to prioritise outreach before clients leave.
Lender concentration
The share of a broker's book held with a single lender or small group of lenders. High concentration (say >40% with one bank) is a revenue risk — a single change in the lender's commission terms or service quality affects a large portion of the book. Aggregators and BDMs watch concentration when discussing volume incentives.
Fixed-rate roll-off
The month a loan's fixed-rate period ends and the loan reverts to the lender's standard variable rate (typically materially higher than the fixed rate). The 60–90-day window before roll-off is the broker's highest-value retention opportunity — clients are actively reviewing rates and most likely to refinance away if not contacted. The fixed-rate expiry guide lays out a 90/60/45/30-day process for holding the loan.
Refinance velocity
The percentage of a book that refinances away within a rolling 12-month window. A benchmark figure for broker book health — typical Australian brokerages run 4–8% per year (excluding clawback-period churn). Higher velocity usually signals concentration in rate-sensitive segments or under-investment in client retention.
Settlement age
Months elapsed between a loan's settlement date and the current date. A key retention input — loans 0–24 months old carry clawback risk; loans 36+ months old are stable trail; loans 60+ months are heading towards refinance fatigue. TrailScope's retention scoring uses settlement-age curves per lender segment.
Loan writer
The individual broker or sub-broker recorded as the writer of a loan in the aggregator's data. In multi-broker brokerages, loan writer is a key filter — performance, commission splits, and retention behaviour all break down by writer. TrailScope surfaces a loan-writer filter when 2+ writers appear in the data.
BDM (Business Development Manager)
A lender's relationship manager assigned to brokers and brokerages, responsible for pricing escalations, policy interpretation, and volume relationships. Strong BDM relationships are a meaningful competitive advantage for an established brokerage. TrailScope can surface lenders where BDM engagement is light relative to volume.
Trail book valuation
The dollar value placed on a broker's trail income for sale, succession or a capital event. The near-universal method is net annual trail × a multiple. Australian books change hands in roughly the 1.9–3.75x range, with about 2.4x a fair starting point for an ordinary book; industry reporting put typical sale multiples near 3x through FY2024–25. Where a book lands depends far more on run-off, seasoning, clawback exposure and concentration than on its size. The trail book valuation calculator builds the multiple from those inputs; the valuation guide explains each one.
Run-off
The share of a trail book that stops paying each year — loans discharged, refinanced to another broker, or paid out — expressed as an annual percentage of the book. It is the single biggest driver of what a book is worth, because a buyer is purchasing future trail: a book shedding 25% a year is worth far less than the same trail shedding 10%. Well-serviced Australian books typically run off at 10–15% a year; unmanaged ones can exceed 25%. Contrast refinance velocity, which counts only the loans that leave to be refinanced, not every discharge. The valuation calculator uses run-off as its dominant lever.
Seasoning
The average age of the loans in a book, measured from settlement. A seasoned book has demonstrated that its loans stay: they are past their clawback period, past the point where a rate-chasing borrower would already have moved, and generating clean trail. Age is evidence, which is why a buyer pays more for it. Books weighted to recent settlements are the opposite — they carry clawback exposure and unproven retention. Around three years' average seasoning is a neutral figure in the valuation model; older lifts the multiple, younger lowers it.
GST on trail and upfront commission
Broker commission in Australia is a taxable supply, so a GST-registered broker receives commission plus 10% GST and remits that GST to the ATO. Aggregator statements routinely show the same commission twice — once excluding GST and once including it — and which figure you book matters: recording the ex-GST amount as your commission understates revenue by about 9% (the inclusive figure is 1.1 times the exclusive one), and a book valued off ex-GST trail reads 9% light at the table. The inclusive figure is the commission; the GST is a liability against it, not a reduction of it. TrailScope imports the inclusive figure by default and keeps the ex-GST value alongside it. The GST guide walks through the statement columns, and the trail commission calculator shows both treatments.