What is Volume Bonus?

When you fund a mortgage with a lender, the lender pays a finder fee to your broker firm. Typically, you would receive a split of that finder fee. For example: a split of 85%-15%. This means 85% of the finder fee to you and 15% of the finder fee to the company. Well, in addition to the finder fee, the lenders pay additional compensation to the broker house. This is called Volume Bonus (VB). There are two types of volume bonuses; Individual VB and Company-Wide VB.

Individual Volume Bonus
The Individual VB programs are based on each consultant's fundings with a particular lender. For example: Xceed calculates and pays VB based on individual consultant's fundings with Xceed. In this case, the total company's volumes are not considered when determining how much volume bonus is paid out.

Company-Wide Volume Bonus
The Company-Wide VB programs consider the total volume from the broker firm in calculating how much bonus is payable. Lenders such as Firstline, First National, MCAP, TD, Scotia etc. are lenders that fall into this category.

Fund More, Earn More
Both VB programs are based on a scale. Essentially, within limits, the more a broker firm funds with a particular lender, the more VB the firm earns. For Company-Wide VB programs, the VB levels range from 5 basis points to as high as 40 basis points.

To put this in perspective, if your broker firm is at an average 25 basis point VB level, a $200K funded mortgage gets a volume bonus of $500 paid to your broker firm for that particular mortgage that you funded. ($200,000 X .0025 = $500)

What is the method of measurement?

Each lender has their own formula but generally the amount of volume bonus paid is based on the annual funded volume. As certain levels are reached, the amounts are usually paid retroactive to the house.

How and when is volume bonus paid?

Again, each lender has their own method of payment. Generally, the VB is paid either monthly, or quarterly. The cheques come to the broker house as additional compensation at those intervals and usually break down what deals they are being paid for.

OK!! How does this really affect me?

Many, many mortgage brokerage companies do not share the volume bonus with their agents. Many of you do not even know it exists. In the cases where the VB is not shared with you, you must evaluate what you receive from your broker firm for VB the broker firm is keeping.


Let's work the numbers…

Let's say we used $25,000,000 as an annual volume (100 deals X $250K/deal). Let us assume that 95% of your business will be completed with a "volume bonus lender"

$25,000,000 x 95% of your business = $23,750,000

$23,750,000 x .25% (amount of VB paid) = $59,375.00


Therefore, based on this math, there is approximately $59,375.00 of VB that is being paid out on your annual volume.


WHAT CAN YOU DO WITH AN EXTRA 50K PER YEAR?!?!?!?!?!?

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