A mortgage broking business in Australia is typically valued at 2–3 times its annual trail income, or 2–4 times EBITDA for a structured multi-broker operation. A sole operator with a $150 million loan book — generating roughly $225,000 in annual trail at 0.15% — might realistically sell for $450,000 to $675,000. A well-run business with $400 million under management, multiple employed brokers, and clean CRM data could fetch $2 million or more. The gap between those two numbers comes down to one thing: how much of the business walks out the door with you.
Mortgage brokers now write roughly 71% of all residential home loans in Australia, according to the MFAA. That market dominance has attracted serious buyer interest — from aggregators building scale, private equity firms rolling up books, and individual brokers looking to buy a trail to supplement their income. The buyer pool is real. The question is what your specific book is worth to them.
The Two Ways Buyers Value a Mortgage Broking Business
There are two valuation frameworks in common use, and they give you different answers depending on the shape of your business.
Trail income multiple is the most common method for smaller and mid-sized books. Buyers look at your annualised trail commission — the ongoing income your loan book generates each month — and apply a multiple of 2 to 3 times. A $200M loan book generating $300,000 per year in trail income would be valued at $600,000 to $900,000 on this basis.
EBITDA multiple is more relevant when you’ve built a proper business: employed brokers, an admin team, a brand that exists independently of you. Here, buyers look at the cash the business generates after real operating costs and apply a multiple of 2 to 4 times. At the high end, a well-run broking business with $500M+ under management and genuine enterprise value might attract a 4 to 5 times multiple from an aggregator or private equity buyer.
Rule of thumb: if you’re a sole operator, use trail multiple. If you employ brokers and the business runs without you, use EBITDA.
The distinction matters because it changes the ceiling. A sole operator’s trail book has a hard limit — buyers won’t pay more than about 3x trail because they’re taking on concentration risk and the uncertainty of client retention. A systemised business with employed brokers and diversified referral relationships can attract multiple bidders and genuinely competitive pricing.
What Your Trail Book Is Actually Worth
Trail commission is paid by lenders to aggregators, who pass most of it through to you. The rate varies by lender and loan type, but 0.15% per annum on the outstanding loan balance is a reasonable average for residential loans. Commercial and SMSF lending often attracts higher trail; basic fixed-rate loans may earn less.
So the maths on a trail book looks like this:
- $100M loan book → ~$150,000 per year in trail → sale price of $300,000–$450,000
- $200M loan book → ~$300,000 per year in trail → sale price of $600,000–$900,000
- $400M loan book → ~$600,000 per year in trail → sale price of $1.2M–$1.8M (more if structured well)
But those are starting points, not destinations. Several factors push the number up or down significantly.
Clawback profile matters enormously. Most aggregator agreements include clawback provisions — if a client refinances within 12 to 24 months, you repay some or all of the upfront commission. A book with high historical clawback rates signals churn, which buyers price in. (The clawback clauses are buried in your aggregator agreement that, frankly, most brokers haven’t revisited since they signed it.)
Loan age profile is equally important. A book full of loans written 18 months ago carries clawback risk; a book where the average loan is 4 years old is largely through that window and generates clean trail. Buyers pay more for seasoned books.
Loan type mix affects both trail rate and retention. Owner-occupier P&I loans tend to be sticky — people don’t refinance as readily as investors do. Investment loan books, especially during rate cycles, can churn faster.
What Kills the Multiple
Key person risk. Every time, without exception.
I spoke to a broker last year who had built a $220 million book over 15 years — mostly through referrals from two local accountants who happened to retire within 12 months of each other. The new partners at those firms had their own preferred broker relationships. His trail held up in the short term, but the buyer could see the concentration risk on a spreadsheet. They offered 1.8 times trail instead of the 2.5 times he’d expected — and that was conditional on a two-year earn-out while he transitioned the relationships.
He had done his numbers. He hadn’t done the risk analysis that a buyer would inevitably run.
Key person risk in a broking context means: if you disappeared tomorrow, how much of the trail would follow you out the door? That question has two parts — client relationships and referral relationships.
Client relationships can often be managed through a structured handover. Referral relationships — the accountant, financial planner, real estate agent, or conveyancer who sends you business — are harder, because they’ve chosen to work with you personally, not with your business. If three referrers account for 60% of your new loan volume, that’s a material risk a buyer will discount heavily.
The fix, ideally executed two or three years before sale, is to diversify referral sources, introduce employed brokers to those referrers, and document every relationship in your CRM with contact details, relationship history, and referral volumes. See our guide to preparing your business for sale for the broader checklist.
Who Buys Mortgage Broking Businesses in Australia?
The buyer landscape has changed significantly in the last five years. You’re no longer just selling to another broker who wants to run a bigger operation. There are now at least four distinct buyer types.
Aggregators — AFG, Connective, Lendi Group, FAST, and others — have strategic reasons to acquire established books. They lock in volume, reduce broker churn, and can spread compliance costs across a larger base. They often pay at the higher end of the trail multiple range because they’re buying strategic value, not just income.
Private equity-backed consolidators have entered the mortgage broking space, following the same playbook seen in accounting, financial planning, and healthcare. They’re looking for businesses with $400M+ in loan book, employed brokers, and clean financials. If you’re below that threshold, you’re unlikely to get their attention — but knowing they exist sets a ceiling for what the market will pay at scale.
Individual brokers looking to buy a trail book as a base for their own practice are the most common buyers for smaller books — under $100M. They pay at the lower end of the range (1.8x to 2.2x trail) but they’re motivated, they move quickly, and they understand what they’re buying.
Financial planning firms and accounting practices occasionally buy mortgage broking books as an add-on to their existing client relationships. This is less common but can produce competitive offers if your client demographic overlaps with theirs.
Knowing your buyer type matters because each values different things. An aggregator wants scale and volume. An individual broker wants a clean trail they can service themselves. A PE-backed consolidator wants management depth and systemisation. Talk to an advisor before you start approaching buyers — the framing of your business should match the buyer you’re targeting.
How to Get a Better Multiple Before You Sell
The single highest-return activity before a broking business sale is reducing key person risk. Beyond that, several other factors move the multiple:
Diversify your referral sources. Move from two or three large referrers to eight or ten smaller ones. Document every relationship properly. Introduce your employed brokers to referral partners so relationships are with the business, not just with you.
Clean your CRM. Buyers will ask for a data extract of your loan book — loan balance, origination date, lender, loan type, and client contact details. If your CRM is a mess, it creates doubt. Clean data signals a well-run operation.
Understand your clawback exposure. Calculate your rolling 12-month clawback rate. If it’s above industry average, understand why and fix it before going to market. A high clawback rate will lower your headline trail figure and spook buyers.
Get your financials in order. Three years of clean accounts, clearly separating personal and business expenses. If you’ve been running personal expenses through the business (and most owner-operators have), start normalising that two years before sale so buyers can see your true EBITDA. See our guide on tax implications when selling your business to understand how the structure affects your after-tax outcome.
Consider whether an earn-out makes sense. Some buyers will offer a higher headline price in exchange for a portion of proceeds being contingent on client retention over 12 to 24 months post-sale. This can work well if you’re confident in your client relationships and willing to stay involved briefly. See how earn-out agreements work in Australia before agreeing to one.
Getting a Valuation
If you’re genuinely thinking about selling, the first step is a proper valuation — not an estimate from another broker at a networking event, and not a calculator that takes your trail income and multiplies it by 2.5.
A proper valuation looks at your loan book composition, your clawback history, your referral source concentration, your employed broker capacity, your aggregator agreement terms, and comparable sales in the market. It gives you a defensible number to take to buyers and a clear picture of where your value sits — and where it doesn’t.
Talk to us at Miro Capital if you’re a broker in Western Australia considering a sale. We work with business owners in the $1M–$20M range and can give you an honest view of what your business is worth and what would need to change to get a better outcome.
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