Work out how much upfront commission a lender can claw back if a loan is discharged early — under the common clawback models. Know your exposure before it becomes a nasty surprise.
The deal
Clawback payable if discharged now
100% of your upfront.
How brokers use this
- Price the risk of a churny deal. Before you write a client you suspect will move quickly, know exactly what’s at stake if they do.
- Protect your income at review time. If a client is refinancing inside the clawback window, this quantifies the cost of losing them — and justifies fighting to retain them.
- Set client recovery clauses fairly. Some brokers pass on clawbacks via a written agreement. Use the real numbers, keep it transparent, and stay inside Best Interest Duty.
- Add it to the industry case. Clawbacks triggered by borrower choices — not broker conduct — are exactly what the FBAA took to Treasury. Log real examples for your association.
How clawback works
When a home loan settles, the lender pays the broker an upfront commission. If that loan is discharged or refinanced within a defined window — typically the first one to two years — the lender “claws back” some or all of that commission. Clawback was designed to stop churning, but in practice it is now most often triggered by ordinary borrower decisions: selling, refinancing, or repaying early, even where the broker did everything right.
Two models dominate. A straight-line taper reduces the clawback percentage evenly over the window (so at month 12 of a 24-month taper, half is repayable). A stepped model claws back 100% in year one and 50% in year two. This calculator estimates the clawback under each model based on how many months have passed since settlement. Always check the exact clawback schedule in each lender’s agreement — they vary, and some calculate on the loan balance rather than the original commission.
Frequently asked questions
How long does clawback usually last?
Most lenders apply clawback over 18 to 24 months from settlement, though the exact period and taper differ by lender. Check each lender’s schedule — this calculator lets you model the common ones.
Can I pass a clawback on to the client?
Some brokers include a clawback recovery clause in their client agreement. It must be disclosed clearly, be fair, and never compromise your Best Interest Duty. Check your aggregator’s compliance guidance before relying on one.
Is clawback calculated on the commission or the loan balance?
Most commonly on the original upfront commission, but some lenders calculate it on the outstanding balance at discharge (a “cost recovery” approach the industry has criticised as unfair). Always confirm the method in the lender’s agreement.
Broker-first tools, every week
The Broker Times builds calculators, templates and playbooks for modern Australian mortgage brokers. Join free.
Disclaimer: This calculator provides estimates for general business-planning purposes only and is not financial, legal or taxation advice. Clawback periods, tapers and calculation methods vary by lender and are set out in your aggregator and lender agreements. Any clawback recovery arrangement with a client must be transparent, fair, and consistent with Best Interest Duty and your licensee’s requirements.