The short answer
A mortgage broking business or trail book in Australia is priced as a multiple of annual trail commission: the monthly payment a lender makes on the outstanding balance of the home loans the broker arranged. One trail-book valuer and lender, in commentary reported by The Adviser in 2025, put sale multiples at roughly 1.9 to 3.7 times annual trail, and reported that the average sale multiple had climbed to about three times annualised trail in FY2024-25. Its managing director later put the median valuation multiple, a fair-value measure rather than the prices buyers were paying, at 2.39 times, up from 2.3 times, with buyers paying a premium above it (Mortgage Professional Australia, January 2026); the firm then raised the multiple in its valuation model by 10 per cent from February 2026 (Broker Daily). Two books with identical trail income can sit at opposite ends of the range: in the same firm's valuation data for FY2024-25, good and weak books were separated by roughly 1.92 to 2.77 times. What separates them is run-off, loan age, clawbacks, lender concentration and how much of the client relationship survives the owner's exit. Those figures come from a commercial participant in a seller's market, where the same commentary reports six or seven buyers for each book, and its managing director has warned that prices could correct if interest rates or regulation change. Treat them as market observations, not rules. The structural point is that a trail book is a wasting asset. At a 20 per cent annual run-off, a book paying $120,000 a year pays about $96,000 a year later and about $61,000 after three years if no new loans are written. The price is therefore not a function of loan book size alone. It is what the surviving stream, plus the buyer's ability to add to it, is worth to someone authorised to service the clients.
What a buyer is paying for: a contingent income stream, not clients
Upfront commission is usually 0.65 to 0.70 per cent of the drawn loan amount, paid when the loan settles. Trail is generally 0.15 per cent of the outstanding loan balance, paid monthly while the loan is not in default or arrears (Mortgage and Finance Association of Australia, MFAA). In a book sale, what changes hands is the trail: the right to a contingent stream under the broker's agreement with its aggregator, which shrinks as balances amortise, as borrowers refinance and as loans are repaid. A trail-book buyer said in 2018 that clients cannot be sold, only an annuity stream, and required sellers to keep servicing clients. Three things must therefore hold for a price to hold: the stream must be payable to the buyer under the aggregator's terms, the clients must stay in their loans, and someone with the right authorisation must keep serving them. The MFAA's State of Mortgage and Finance Broking Report 2026 (covering 2025, published September 2026) put median gross trail revenue per broker at $77,894, as reported by Mortgage Professional Australia. The trail-book valuer quoted above reported an average sale price of about $250,000, in a range from $100,000 to more than $2 million.
Reading the loan book: run-off, age, clawbacks and concentration
Run-off is the largest single driver. That valuer reported annual loan run-off of about 25 per cent in FY2023-24 and about 23 per cent in FY2024-25. The managing director of another trail-book buyer described 20 per cent as the historical norm in 2023. At those rates trail roughly halves in about three years unless new loans replace it. Age matters because new loans carry the highest refinance risk while old loans have amortised: The valuer's managing director puts the best loan age at 24 to 60 months. Clawback is the second adjustment. A lender may reclaim upfront commission if a loan is refinanced or repaid early, typically within 18 months to two years according to the MFAA, and brokers cannot pass that cost on to the borrower. Regulations made after the Royal Commission cap the clawback period at two years. The MFAA's 2026 report put median gross clawback per broker at $11,442 (a median of aggregator-level figures) and noted that clawbacks tend to rise when refinancing is strong. A sound cross-check models the trail as a decaying annuity: each year's trail is the previous year's less run-off, plus trail from expected new lending, discounted at a rate that reflects the risks below. The evidence a buyer or valuer asks for:
- ·Twelve months of lender trail statements reconciled to bank receipts, with the latest month annualised as the starting point (trailing receipts overstate a decaying book)
- ·A loan-level schedule: balance, lender, settlement date, fixed-rate and interest-only expiry, and owner-occupier or investor
- ·Run-off by month and by balance, with the reason for each discharge where known
- ·The age profile against the 24 to 60 month window, and the share of loans still inside the clawback period
- ·Clawback history: amounts, dates and lenders
- ·Concentration by lender, top ten clients, referral source and geography
- ·Any arrears, suspended trail or lender notices affecting payment
- ·New lending over the last 24 months and where it came from, so a buyer can judge whether the book is being replenished
Book sale, brokerage or franchise: how each prices differently
A pure book sale is priced on trail alone, and sellers can sell part of a book: one trail-book buyer has described sales of anywhere from 20 to 100 per cent. A going-concern brokerage is priced on maintainable earnings that also include upfront commission from new lending. Upfront income follows settlements, which move with the lending cycle and with refinance activity, so a strong year should be normalised, not capitalised, and the owner's own production must be replaced at a market wage. That is why a sole operator's goodwill is largely personal. The MFAA's 2026 report has multi-broker offices at 56.8 per cent of classified brokers, up from 52.9 per cent, and a book attached to a team that keeps writing carries less key-person risk than one attached to a departing sole operator. A franchise adds the franchise agreement's term, fees and transfer conditions as deductions. Mortgage Choice reported in 2012 that many exiting franchisees sold at about three times net trail, a reminder to check whether a published multiple applies to gross trail or to trail after the aggregator's or franchisor's share. The buyer matters too. The trail-book valuer quoted above has said some investors buy books purely for the cash flow, and a financial buyer that will not originate or cross-sell prices the stream differently from a broker who expects to retain clients and add loans.
Licence, aggregator and policy: the standing deductions and risks
ASIC says anyone who engages in credit activities generally needs an Australian credit licence or authorisation as a representative of a licensee, and that licensees must monitor and supervise their representatives, including checking training (for home loan credit assistance, a Certificate IV in Financial Services, Finance/Mortgage Broking) before authorising them. For a sale, that means a buyer who will service the clients needs authorisation of its own, so the aggregator's onboarding of the buyer is a gating item. The aggregator's agreement also decides whether and on what terms trail can move at all: a trail-book buyer's published checklist (2013) advises confirming the conditions on which trail will be paid to the purchaser, the circumstances in which it can be suspended or terminated, and obtaining the aggregator's written approval before paying. From 1 January 2021, Part 3-5A of the National Consumer Credit Protection Act 2009 has required mortgage brokers to act in the consumer's best interests when giving credit assistance on home loans. Retention therefore cannot be assumed: where a better loan is in the client's interests, the duty points towards recommending it even if that ends a trail stream, which is part of run-off no contract can remove. Policy risk is real but dated. The Royal Commission recommended ending trail and upfront commissions, the Government announced on 12 March 2019 that it would not prohibit trail on new loans and would review it instead, and the review scheduled for 2022 was dropped in March 2022. Trail remains lawful, but a valuer treats the remuneration regime as a risk reflected in the multiple or discount rate, not as a forecast. Key-person risk is managed through a handover period, non-compete clauses from loan writers and key brokers, and checks on the seller's standing and warranties.
A worked example: from reported trail to a supportable range
Consider a hypothetical sole-operator mortgage broking company with no staff, being sold to another broker. The company and its figures are invented for illustration and are not a benchmark; GST and tax are ignored. The residential book is $90 million across 150 loans, an average of $600,000, and every loan is assumed to pay trail at 0.15 per cent. That gives $135,000 of annual gross trail, which matches the latest monthly statement of $11,250 annualised. Over the past 12 months the company actually received $142,000, so the annualised figure is about 5 per cent below trailing receipts, and the buyer starts from the current run-rate. After the aggregator's share, which we assume leaves the company 80 per cent of gross trail, the company keeps $108,000. That is the base for the multiple, because it is what the buyer will receive. Run-off over the past 12 months was 24 per cent by balance, a little above the roughly 23 per cent reported for FY2024-25 in the commentary above. One lender holds 55 per cent of the book, and loans settled in the last two years are 40 per cent of the balance, which is young and more exposed to refinance. On those facts we place the book in the lower half of the published 1.9 to 3.7 times range and use an assumed band of 2.2 to 2.8 times for illustration. $108,000 at 2.2 times is $237,600, and at 2.8 times is $302,400. Two adjustments follow. First, the company is being sold, so clawback exposure on loans inside the two-year window stays with it. A review of recent settlements and discharge history puts the likely exposure at $8,000, so the range becomes $229,600 to $294,400. Second, run-off explains why the band is not higher: with no new loans and 24 per cent run-off, $108,000 of annual trail falls to about $82,000 after one year, $62,400 after two and $47,400 after three. Where the concluded position sits depends on aggregator approval of the buyer, the handover period and any non-compete.
What a defensible mortgage broking valuation file contains
The multiple band is wide, so the supportable position is won or lost in the evidence. The conclusion is expressed as a supportable range with the most supportable position concluded within it, and the file behind it typically contains:
- ·Financial statements for up to three years plus year-to-date trading, with commission income split into upfront, trail and other, reconciled to aggregator statements and the bank
- ·Twelve months of trail statements by lender and a loan-level schedule reconciled to them, with the latest month annualised
- ·Run-off, clawback and new-settlement history by month, with the trend stated rather than assumed
- ·Age, lender, client, referral-source and geographic concentration analysis
- ·The aggregator or franchise agreement: who holds the trail, transfer and consent conditions, suspension and termination terms, and any fees or splits
- ·The seller's licence or credit representative authorisation, and what authorisation an incoming buyer will need
- ·A normalisation schedule with evidence for each adjustment, above all the owner's market wage as a broker
- ·A run-off-adjusted cash flow cross-check, the published multiples with their source and date, and sensitivity across the supportable range
When the number has consequences
A rule-of-thumb multiple is enough for early thinking. A formal valuation is worth commissioning once the number has consequences someone else can test: selling or succession planning, where a defensible price survives a buyer's diligence on trail statements and run-off; an aggregator, franchise or partnership exit, where both sides need a number they can test rather than argue about; family law matters, where a broking business or trail book is an asset to be valued; and CGT events, including small business CGT concession claims under Division 152 of the ITAA 1997, where eligibility can turn on documented market values and the $6 million maximum net asset value test. The market value standard for tax and other formal purposes comes from Spencer v Commonwealth (1907), which looks to a willing but not anxious buyer and seller, and we document the position with the ATO's guidance 'Market valuation for tax purposes' in mind. Reports follow the guidelines of APES 225 Valuation Services. Oliver Group prepares independent valuations only, is not a tax agent and does not give tax, legal or financial advice, so your accountant, lawyer or adviser applies the valuation in their own field. Oliver Group's fees are set by the annual turnover of the business: a Small Business Valuation is $1,495 + GST for turnover under $2 million, a Medium Business Valuation is $2,495 + GST for turnover between $2 million and $10 million, and a Large Business / Start-Up Valuation is $3,495 + GST for turnover over $10 million or for a start-up. A small-business draft is delivered in 2 business days and a medium-business draft in 3 business days; the delivery date for a Large Business / Start-Up Valuation is agreed before commencement. Delivery time starts once payment and all required information have been received. The fee is fixed in writing before work begins and never depends on the concluded value.