Mortgage management more profitable

Firstfolio Limited is targeting mortgage management over origination for future company growth aspirations, due to higher profit levels.

Mark Forsyth, Firstfolio chief executive officer, said mortgage management on a stand-alone basis can be many times more profitable than origination.

"On a $300,000 loan, let's say the bank is paying 0.6 per cent, that's $1200. On that our average margin is 10 per cent, or $120.

"On that same mortgage-managed product we are on average looking at keeping ourselves 0.5 to 0.6 per cent, which could be up to ten times higher than origination."

Forsyth said broker commissions have not been cut at Firstfolio, and ruled out cuts in the short term.

"It's a competitive advantage we have versus the banks.

"We are still paying anywhere between 0.7 and 0.85 per cent upfront depending on the broker."

Forsyth added that there is no specific focus on geographic location for acquisitions, with the desired book size around one billion dollars.

Firstfolio currently has over 800 brokers.