How much does a loan officer make? Basis points, commission and salary explained

It's the question everyone asks and few answer clearly: how much does a loan officer make? The answer depends less on the title and more on three things: your pay plan, the loan sizes in your area and how many loans you close.

The starting point: the national median

According to the Bureau of Labor Statistics (BLS), the median pay for loan officers was $76,690 in May 2025. It's a useful reference, but it hides a reality: in this career, some people earn much less in their first year and others multiply that figure with a strong base of realtors and referrals.

What a basis point is

A basis point (bps) is one hundredth of a percentage point: 100 bps = 1%. Most compensation plans are expressed in basis points on the loan amount.

Example: a $300,000 loan on a 75 bps plan pays $300,000 × 0.0075 = $2,250 to the loan officer.

The most common pay plans

• Commission only: you get paid only when the loan closes. It usually pays more basis points, but income is variable.
• Salary plus commission: a fixed base plus a smaller per-loan commission. Common at banks and in some starter roles.
• Draw: the company advances a monthly amount that is later deducted from your commissions. It helps you get started, but read carefully what happens if you don't cover it.
• LO1 / LO2 teams: when two originators work the same loan, the commission is split as agreed in writing.

A realistic calculation

Assume an average loan of $300,000 and a 75 bps plan:

• 2 loans a month: $4,500 a month, about $54,000 a year.
• 4 loans a month: $9,000 a month, about $108,000 a year.
• 6 loans a month: $13,500 a month, about $162,000 a year.

These are gross, illustrative figures: real plans vary by company, loan type and lead source. But they show what matters: your income grows with volume, and volume grows with relationships.

What the law doesn't allow

Regulation Z (the loan originator compensation rule) sets clear limits every loan officer must know:

• Your pay can't depend on the loan's terms, such as the interest rate. Nobody can pay you more for putting a client in a higher rate.
• If the consumer pays you directly, you can't also be paid by the lender on the same transaction.
• Your pay can vary with volume or loan amount, which is why basis points are the norm.

This rule protects the consumer and it protects you too: it forces you to compete on service, not pricing tricks.

What pushes your income up

1. Your realtor network: five active agents who trust you can sustain a career.
2. Your past clients: refinances, new purchases and referrals.
3. Your speed: same-day pre-approvals and on-time closings make you indispensable.
4. Your niche: FHA, VA, first-time buyers, the Hispanic market, investors… Being known for something attracts clients.

Before you sign with a company

Ask for the compensation plan in writing and ask: how many bps do you pay by lead source? Are there per-loan minimums or caps? Who pays for processing? When is commission paid after closing? A clear plan is worth more than a generous one you don't understand.