Online Mortgage Lending Break-Even Analysis: Month 19 Target

Fixed costs $111.2K/mo Core monthly base

Contribution margin 87% After variable costs

Break-even revenue $127.8K/mo Revenue cover point

Break-even timing Month 19 Model crosses zero

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even.

Lean Base Full

Monthly revenue Revenue drives the margin left to cover fixed monthly costs. $ Lower revenue Higher revenue Variable expenses These rise with volume, like marketing and loan processing. $ Lower direct cost Higher direct cost

Money available to cover fixed costs $160,667 $180,120 revenue - $19,453 variable expenses

Margin ratio

89%

Covers fixed costs

$1,750 short

Fixed monthly costs This is the monthly cost base contribution margin must cover. $ Lower fixed cost Higher fixed cost

Break-even chart Revenue Total costs

Which online mortgage lending expenses are fixed, and which move with funded loan volume?

Cost classification

Break-even is only useful if fixed overhead, volume-driven fees, and step hires are separated. Exclude one-time capex such as the $300,000 initial platform build unless you choose to add it to operating break-even.

Expense	Cost	Break-Even Treatment	Common Mistake
Cloud Hosting Services	Fixed	Include $10,000/month in fixed overhead; first-year run rate is $120,000.	Scaling it with loan volume when the model states a flat monthly amount.
Core Software Licenses	Fixed	Include $5,000/month in fixed overhead across Month 1 through Month 60.	Mixing recurring licenses with one-time platform development capex.
Compliance Legal Fees	Fixed	Include $8,000/month because compliance coverage is needed before each added loan closes.	Treating compliance as optional until volume ramps.
Other Monthly Operating Overhead	Fixed	Include data security, rent utilities, professional services, admin, and insurance at $11,500/month.	Leaving small fixed lines out and understating the break-even hurdle.
Year 1 Core Team Wages	Fixed	Include $920,000/year for the first-year core team in fixed payroll.	Charging executive, compliance, and engineering payroll only when loans fund.
Marketing Customer Acquisition	Variable	Apply 10.0% in Year 1 and 8.0% in Year 2 as volume-linked selling spend.	Putting acquisition spend in fixed overhead and overstating contribution margin.
Loan Processing Underwriting Fees	Variable	Apply 3.0% in Year 1 and 2.8% in Year 2 against funded activity.	Using one flat dollar amount even as funded loan volume changes.
Added Loan Officers, Engineers, Data Analysts, and Marketing Staff	Semi-fixed	Add headcount in steps as capacity grows; salaries include $110,000, $130,000, $95,000, and $100,000 per FTE.	Smoothing hires evenly each month instead of adding capacity by stage.

How does break-even shift from lean to base to full volume in online mortgage lending?

Scenario table

Break-even improves as funded volume rises, but fixed overhead also climbs from about $111.2k to $201.2k a month. Year 1 EBITDA is -$923k, Year 2 is -$21k, and Year 3 reaches $2.453m, so only the full case gives a clear cushion.

Planning case only; funded-loan count and average loan size are not supplied, so these break-even figures are model-based, not guarantees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean case, Year 1 funded volume	$39.4k	$5.1k	$111.2k	87.0%	-$76.9k	Still below break-even; fixed payroll outpaces margin.
Base case, Year 2 funded volume	$180.0k	$19.4k	$162.4k	89.2%	-$1.8k	Near break-even; a small miss can flip the result.
Full case, Year 3 funded volume	$443.6k	$37.7k	$201.2k	91.5%	$204.4k	Above break-even; higher volume leaves a real cushion.

What breaks first if mortgage closings slow or costs rise?

Stress test

This plan has very little room for slippage. A 10% revenue miss, a 15% rise in fixed burn, or margin pressure from 10.8% to 13.0% of revenue can push a tight monthly break-even back into deficit.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$182,100	$0 cushion	It only works if funded volume stays on pace.
Revenue shortfall	Monthly revenue falls 10% to about $163,900.	$182,100	$16,200 gap	Slower closings open a monthly hole fast.
Fixed-cost pressure	Fixed overhead rises 15% to about $186,800.	$186,800	$24,400 gap	Compliance and overhead can outrun funded volume.
Margin pressure	Variable expenses rise from 10.8% to 13.0% of revenue.	$186,100	$4,000 gap	Higher acquisition and underwriting costs eat the cushion.
Combined pressure	Revenue falls 10%, fixed overhead rises 15%, and variable expenses rise to 13.0% of revenue.	$226,300	$44,200 gap	Three hits at once make the plan fragile.

What should you verify before you commit to hiring, marketing, and warehouse funding?

Founder checklist

Check the model at Month 19 break-even, not just at launch. The business only looks ready if warehouse lines, staffing, marketing, and reserves can carry funded volume, fixed burn, and the $615K build without counting applications as closed loans.

1Warehouse Line60M / 180M

Your current line assumption trails planned funded volume of $75M in Year 1 and $230M in Year 2, so the warehouse line has to expand before closings scale.

2Fixed Burn$34.5K/mo

Keep core services at $34.5K a month, and do not open paid acquisition until the $8K compliance layer is in place, because this burn starts on day one.

3Unit Margin87% CM

Year 1 variable costs are 13.0% of loan volume, so verify the remaining spread can still cover warehouse interest and overhead.

4Launch Demand10.0%

Test borrower lead flow before you spend at the Year 1 marketing rate, because applications only matter if they turn into funded loans.

5Staff RampMonth 13

Lock underwriting and processing workflows before Month 13, when senior loan officers start to come in and payroll moves from $920K in Year 1 to $1.535M in Year 2.

6Cash CushionMonth 19

Keep the $615K one-time build spend separate from operating burn, and stress test the Month 19 break-even path against the -$113.469M minimum cash trough.