Let’s run through a simple example because I think a lot of mortgage brokers miss what’s actually going on with paid leads.
On paper, the numbers look ridiculous.
Say it costs us $30 to generate a first home buyer lead.
Now let’s assume we convert at 10%.
That means we need 10 leads to get one deal.
So:
- $30 per lead
- 10 leads per deal
- $300 to win a client
Now let’s keep the maths simple.
Average loan size: $500k
Upfront commission: roughly $3,000
So in theory:
- $300 out
- $3,000 in
That’s a 10x return on cash.
Sounds like an infinite money glitch, right?
And honestly… it kind of is.
Here’s the catch.
We Don’t Get Paid Back Straight Away
Mortgage broking isn’t like eCommerce where someone buys today and you get paid tomorrow.
We spend the money now…
But we don’t see the commission for months.
If we’ve got a 4-month cash conversion cycle (which is pretty standard — and usually longer with first home buyers), then we’re out of pocket for a solid stretch before the money comes back.
So instead of:
- Spend $300 → Get $3,000
It’s more like:
- Spend $300 today
- Spend another $300 next week
- Spend another $300 the week after
- Keep spending for months
- Then eventually… commissions start landing
That’s the real game.
The Real Barrier Isn’t ROI — It’s Cash Drain
Most brokers aren’t scared of the return.
They’re scared of bleeding cash for four months straight.
And I get it.
It sucks watching money go out every week while nothing comes back in yet.
That’s why most brokers tap out early, even when the maths makes sense.
But If We Can Hold the Line…
For the brokers willing to wear the cash drain upfront, something powerful happens.
After four months, it becomes house money.
The engine starts feeding itself.
Leads turn into deals.
Deals turn into upfronts.
Upfronts fund more leads.
That’s when paid acquisition stops feeling risky and starts feeling predictable.
Pro Tip: Fees Change Everything
If we can figure out how to charge a fee — even a small one — we flip the cash conversion cycle on its head.
Instead of waiting four months to get paid, we get paid at the start.
That changes the whole equation.
Paid leads aren’t the problem.
The timing is.
Once we understand that, we stop treating marketing like an expense…
And start treating it like an investment with a delay.
That’s the difference.
