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. AFG, for example, uses an eight three-month-band schedule across 56 lenders. 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.
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, inheritance, or capital-event purposes. Australian trail books typically transact at 1.5–2.2x annualised trail revenue, with multiples reflecting book stability, lender mix, and historical retention. Run-off forecasting (how trail will decay over time) underpins the maths.