How Much Commission Do Loan Officers Make on a $500,000 Loan in Louisiana?
It’s a fair question.
And yes, it feels a little like asking someone their salary.
But here’s the thing: loan officer compensation is disclosed in your paperwork before you ever close. It appears on your Loan Estimate. It’s not a secret.
So let’s talk about it clearly.
How Loan Officer Compensation Actually Works
Loan officers are typically paid in basis points.
A basis point is simply a percentage of the loan amount.
100 basis points = 1%
75 basis points = 0.75%
125 basis points = 1.25%
Most loan officers are compensated somewhere within that general range.
Here’s a simple example:
If compensation is 1% on a $500,000 loan, that equals $5,000 in gross compensation.
That amount is paid by the lender and built into the loan pricing. It is disclosed upfront. It is not a surprise fee added at closing.
It is also not take-home pay. From that gross amount come company splits, overhead, licensing, compliance, insurance, technology, and operating costs.
But the math itself is straightforward.
Do Bigger Loans Mean Bigger Commission?
Yes.
If the percentage stays the same and the loan amount increases, the dollar amount increases. That’s simply how percentages work.
What does not happen is this:
The percentage does not increase just because the loan is larger.
If a loan officer is paid 1%, they are paid 1% whether the loan is $200,000 or $500,000.
How This Works as a Mortgage Broker in Louisiana
Structure matters here.
As a mortgage broker licensed in Louisiana, my compensation is set as a flat percentage of the loan amount. It does not change based on:
Loan type
Interest rate
Borrower profile
Whether you choose:
Conventional
FHA
VA
USDA
My percentage remains the same.
Most mortgage brokers are compensated somewhere between 1% and 2.75% of the loan amount, depending on the company’s structure and operating costs.
That means I am not paid more or less depending on which product you choose. The recommendation is based on what fits your situation best, not which one pays differently.
Some large retail lenders operate under different internal margin structures. In certain cases, company margins may vary depending on the loan type. That does not automatically make one structure better or worse, but it does mean compensation models can differ.
In Louisiana, compensation rules are regulated. We cannot arbitrarily change what we earn based on the borrower or adjust compensation mid-process.
Transparency is built into the system.
What Borrowers Should Actually Watch For
The bigger concern usually is not commission. It is how the loan is priced.
Here is what matters more:
The interest rate
Discount points
Origination fees
Lender fees
Total closing costs
APR
Some lenders advertise very low rates but charge high points. Others advertise “no lender fees” but adjust pricing elsewhere.
The right way to compare loans is to look at the total cost, not just one line item.
Why This Question Isn’t Wrong
If you’re asking how loan officers get paid, it probably means you want to make sure you are not being overcharged.
That’s reasonable.
The good news is this:
Compensation is disclosed.
Rates are competitive.
And you are allowed to ask questions.
You should.
The Bottom Line
On a $500,000 loan in Louisiana, a typical loan officer compensation range might fall between $5,000 and $13,750 gross, depending on the basis point structure.
That percentage does not change based on your rate.
It does not change based on whether you choose FHA or conventional.
And it is disclosed upfront before you move forward.
If you ever want to walk through your Loan Estimate line by line and understand exactly how your loan is structured, I am happy to do that.
No pressure. No weirdness. Just clarity.