Mortgage Broker Break-Even: About 16 Funded Loans a Month

Fixed costs $21.4K Base monthly burn

Contribution margin 89% After variable costs

Break-even revenue $24.0K Monthly target

Break-even timing Month 5 Forecast crossover

Break-even calculator

Use this to test how monthly revenue, direct costs, and overhead shape break-even for a mortgage broker.

Lean Base Full

Monthly revenue Revenue is the pool left after direct costs to cover fixed overhead. $ Low sales High sales Variable expenses These are direct costs that rise with each loan file, like lead spend and partner fees. $ Light direct cost Heavy direct cost

Money available to cover fixed costs $34,100 $38,300 revenue - $4,200 variable expenses

Margin ratio

89%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the business must cover before profit starts. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which expenses stay fixed, and which move with closed loan volume?

Cost classification

Break-even is reliable only when per-file fees reduce contribution margin and stable overhead stays fixed. Don’t bury owner salary inside profit, and exclude one-time startup items unless the model amortizes them.

Expense	Cost	Break-Even Treatment	Common Mistake
Office rent	Fixed	Use $3,500 per month in fixed overhead from Month 1 through Month 60.	Treating rent as volume-driven lowers required closings.
CRM and loan origination software subscriptions	Fixed	Use $800 per month while subscription scope stays unchanged.	Forgetting it after launch understates monthly burn.
Professional insurance (E&O)	Fixed	Include $300 per month before profit because it does not move with closed files in the model.	Dropping it from break-even makes Month 5 look easier.
Third-party loan processing fees	Variable	Deduct 2.0% of revenue in the first year, falling to 1.5% by Year 5, before contribution margin.	Treating per-loan processing as fixed overstates contribution margin.
External compliance checks per loan	Variable	Deduct 1.0% of revenue in the first year and 0.8% by Year 5 because checks run per loan.	Burying compliance in overhead hides file-level drag.
Marketing and lead generation, variable portion	Variable	Deduct 5.0% of revenue in the first year, falling to 3.0% by Year 5, and keep the annual marketing budget separate.	Mixing CAC budget with variable spend double-counts leads.
Referral partner fees	Variable	Deduct 3.0% of revenue in the first year, falling to 2.0% by Year 5.	Counting referrals as free makes margin too high.
Second loan officer and administrative assistant	Semi-fixed	Add the Year 2 salary step: $60,000 for the second loan officer and $40,000 for the administrative assistant.	Smoothing hires monthly hides the capacity cliff.

How does break-even change across lean, base, and full operating paths?

Scenario table

As staffing and marketing expand, fixed overhead rises faster than margin gains, so break-even revenue steps up. The lean path is closest to cover, while the base and full paths need a deeper funded pipeline to stay above water.

Planning assumptions only; actual break-even will shift with file mix, pricing, and closing speed.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$264k	$29k	$235k	89%	$0	Close to break-even; any slip in funded volume turns this negative.
Base expansion	$372k	$37k	$335k	90%	$0	Higher overhead needs a thicker pipeline before adding more cost.
Full growth	$442k	$40k	$402k	91%	$0	Works only if the funded pipeline can stay consistently deep.

What breaks first if closings slow, lead costs rise, or overhead increases?

Stress test

The base plan only has about a $12k cushion, so a 15% revenue drop or a 10% jump in fixed overhead can flip it negative. Paid leads above $500 CAC, weak referrals, and slow files are the first red flags.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$265k	$12k cushion	Only a small cushion; monitor early.
Revenue shortfall	Funded loans fall 15% while variable costs stay at 11% of revenue.	$265k	$25k gap	Weak referrals or slower closings eat the cushion fast.
Fixed-cost increase	Fixed overhead rises 10% to about $259k.	$289k	$12k gap	Hiring or rent growth before volume is repeatable hurts fast.
Margin pressure	Variable expense ratio rises from 11% to 16% of revenue.	$280k	$3k gap	Paid leads above $500 CAC can erase the cushion.
Combined pressure	Revenue falls 15%, variable ratio rises to 16%, and fixed overhead rises 10%.	$308k	$61k gap	All three shocks together push the plan deep red.

What should the founder verify before signing the office lease and funding lead spend?

Founder checklist

Test the pipeline, cash, and staffing math before you lock in rent, payroll, or paid leads. Break-even shows up by Month 5, but only if the Year 1 marketing plan and the Month 2 cash need of $827K are both covered.

1Launch Demand$25K Y1

Prove referral flow before you spend the full Year 1 marketing budget, and keep the $55K launch build-out separate so one-time setup does not get mixed into monthly break-even math.

2Office Burn$6.4K/mo

Your fixed office stack is about $6.4K a month before payroll, so signing the $3,500 rent too early locks in burn before funded loans arrive.

3Margin Floor89% CM

Year 1 processing, compliance, marketing, and referral fees total about 11% of revenue, so the blended contribution margin is about 89% before rent and salaries.

4CAC Check$500 CAC

Compare the $500 CAC with funded-loan revenue before scaling paid spend, because each closed loan has to pay back acquisition cost plus fee drag.

5Cash Buffer$827K

Hold the $827K minimum cash cushion shown for Month 2, because break-even does not arrive until Month 5 and the early cash dip is steep.

6Payroll Ramp$372K/mo

Delay the Year 2 loan officer and admin hires, which start in Month 13, until funded volume can support about $372K a month in revenue.