One line of arithmetic
Nearly every trail book in Australia is valued the same way: net annual trail × a multiple. Net means after the aggregator's share — the figure that reaches your account, not the gross figure on the lender statement — and it should be the GST-inclusive amount. Get either of those wrong and the multiple faithfully scales the error.
The multiple is where the negotiation lives. In practice books change hands somewhere in the 2–3.75× range. Industry reporting through FY2024–25 put typical sale multiples at around three times annualised trail as buyer demand firmed, and the Radar Results price guide forecast 2.75–3.75× for mortgage trail books to June 2025. Those are market prints for books that have been prepared for sale. An ordinary book, valued cold, sits lower — the valuation calculator on this site starts at 2.4× and adjusts from there, deliberately conservative at the bottom so a first self-valuation errs toward what a cautious buyer would pay.
What the multiple is actually pricing
A buyer is not buying today's trail. They are buying the trail the book will still be paying in three, five and seven years, and the multiple is their estimate of how much of today's figure survives that long. Every adjustment below is a proxy for one question: how durable is this income?
Run-off
The share of the book that stops paying each year — discharged, refinanced away, paid out. It is the dominant lever and it is not close. A book shedding 10% a year still pays roughly 60% of today's trail in year five; a book shedding 25% pays about 24%. Same trail today, radically different purchase. Well-serviced books run at 10–15%; unmanaged books can exceed 25%. If you can show 24 months of low, stable run-off from your own data, you have made the single strongest argument available to a vendor. Run-off, defined.
Clawback exposure
Loans settled inside the last 24 months carry a refundable upfront. If they discharge, the lender reclaims some or all of it — and after a sale, that liability sits with whoever holds the book. A book weighted to recent settlements is transferring risk to the buyer, and the buyer prices it. The lender clawback schedule shows the rate by lender and month; the clawback calculator turns one loan into a dollar figure. For a book, the useful number is the share of trail-paying loans still inside their window — under 20% is comfortable, over 40% invites a retention clause. Clawback, defined.
Seasoning
Average loan age from settlement. Older loans have already proven they stay: they are past clawback, past the point a rate-chaser would have moved, and paying clean trail. A buyer pays more for evidence than for promise. Around three years' average seasoning is neutral; a book averaging five years with low run-off is the kind that fetches the top of the range. Seasoning, defined.
Lender concentration
If 60% of your trail sits with one lender, a single repricing decision, a channel exit or a commission change moves 60% of the buyer's income. Diversification across lenders is worth a small premium; heavy concentration is worth a discount, and a buyer will ask what happens to the book if that one lender changes its trail terms. Concentration, defined.
Data quality
The quiet one, and the one vendors most underestimate. A buyer cannot pay for what they cannot verify. If you can hand over loan-by-loan data — settlement date, lender, balance, trail rate, the last 24 months of statements reconciled against it — due diligence is short and the price holds. If the book is a pile of PDFs and a spreadsheet that does not reconcile, the buyer discounts for the uncertainty and for the work, and the discount is often larger than any single lever above. Clean data is the cheapest multiple you will ever buy.
Cross-checking the answer
A multiple on its own can be argued either way, so buyers sanity-check it against two other lenses:
- Basis points of loans under management. Divide the valuation by the book's total balance. Australian books typically land between roughly 30 and 55 bps of LUM. A figure outside that band means either an unusual trail rate or an unusual multiple, and it is worth knowing which before someone else points it out.
- Discounted cash flow. Project the trail forward at your run-off rate, discount it at a rate that reflects the risk (12–15% is a common range for broker books), and sum it. If the DCF lands well below the multiple valuation, the run-off assumption in the multiple is too kind.
The in-app version of the calculator runs all three on your actual book; the public version shows the multiple build-up with the bps check.
How deals are actually structured
Few trail book sales are a single cheque. Common terms include a portion of the price deferred and paid against the trail actually received over 12–24 months, a run-off clawback where the price steps down if the book decays faster than represented, and a restraint on the vendor writing loans for the same clients. All of these exist because the buyer is exposed to the same durability question the multiple was trying to answer — they are the price of uncertainty. The more of it you remove with data, the more of the price arrives up front. Take legal advice on the contract; the arithmetic in this guide is the easy part.
Preparing a book for sale
- Reconcile 24 months of statements to a loan-by-loan register. Fix the GST column if it is wrong.
- Compute run-off from that register, not from memory. Show the trend.
- List every loan inside its clawback window, with the lender's rate for the current band.
- Show lender mix and average seasoning.
- Run the numbers through the calculator at a conservative run-off and a realistic one. Know both before the first conversation.
Indicative guidance only. Actual transactions depend on diligence, contract terms, restraint clauses and payment structure, and multiples move with rates and demand. Get a formal appraisal and legal advice before you transact.
Related reading
- Trail book valuation calculator — builds the multiple from the inputs this guide explains.
- Lender clawback schedule — the exposure a buyer prices, by lender and month.
- GST on trail commission — value off the inclusive figure or leave 9% on the table.
- Run-off, seasoning and concentration, defined.
FAQ
What multiple do mortgage trail books sell for in Australia?
Commonly somewhere between 2× and 3.75× net annual trail. Industry reporting through FY2024–25 put typical sale prints near 3×, with forecast ranges of 2.75–3.75× for prepared books. An ordinary book valued cold sits lower; quality adjustments move it up.
Should I value my book on gross or net trail?
Net — what reaches you after the aggregator split — and GST-inclusive. Valuing on the gross statement figure overstates the book by your split percentage; valuing on ex-GST trail understates it by about 9%.
What reduces the value of a trail book most?
Run-off. A book shedding 25% a year pays a quarter of today's trail by year five; one shedding 10% pays 60%. After that, clawback exposure, young seasoning, lender concentration and — very often underestimated — data a buyer cannot verify.
What is a good run-off rate?
Well-serviced Australian books typically run off at 10–15% a year. Above 20% a buyer will discount noticeably; above 25% the book is losing trail faster than most multiples assume.
How do buyers cross-check a valuation?
Two ways: basis points of loans under management (most books land between about 30 and 55 bps of total balance) and a discounted cash flow of the projected trail at the book's run-off rate. If the DCF sits well below the multiple valuation, the run-off assumption is too optimistic.
Is this a formal valuation?
No. It explains the method buyers and valuers use so you can frame a conversation. Real transactions turn on diligence, contract terms, deferred consideration and restraint clauses. Get a formal appraisal before you transact.