IMB profits rise to $785 per loan in 2025 as servicing keeps more lenders in the black

Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks earned an average profit of $785 on each loan they originated in 2025, up from $443 per loan in 2024, according to the Mortgage Bankers Association (MBA)’s 2025 Annual Mortgage Bankers Performance Report, released Thursday.

MBA reported that the average net production profit reached 21 basis points in 2025, the highest level in four years. That is still less than half the historic average of 45 bps, or $1,031 per loan, since the study began in 2008.

“The average net production profit for IMBs in 2025 reached its highest level in four years at 21 basis points,” said Marina Walsh, the MBA’s vice president of industry analysis. “While profits have improved slightly in recent years, they are still less than half the historical average going back to 2008.

“There was also wide variability between top and bottom performers due to differences in product mix, volume levels, geography and cost efficiencies, among other factors.”

The report shows that profitability improved alongside higher origination volumes and larger average loan sizes, but lenders did not see the typical cost relief that comes when volume rises.

Total production expenses increased to $11,094 per loan in 2025, up from $11,076 in 2024, even as total production revenues rose to $11,879 per loan (compared to $11,520 the year prior).

“Overall annual production volume was up in 2025, while loan balances rose to new study-highs,” Walsh said. “Despite the increase in volume, per-loan production costs were slightly higher than in 2024.

“Historically, when volume picks up, fixed costs are spread over more loans, resulting in a reduction in per-loan costs. However, that was not the case in 2025 as rising wage growth, increases in third-party charges, and reduced application pull-through negatively impacted origination costs. Containing origination costs and increasing efficiencies will remain a differentiator between profitable and unprofitable companies in 2026.”

More firms return to profitability

Including both production and servicing, 78% of firms in the study posted pretax net profits in 2025, up from 68% in 2024 and 36% in 2023. Without the contribution from servicing, just 64% of firms would have been profitable in 2025, underscoring the continued importance of servicing income for IMBs’ overall performance.

Net servicing financial income — which includes servicing operational income, mortgage servicing right (MSR) amortization, and gains and losses on MSR valuations — fell to $89 per loan in 2025, less than one-third of the $301 per-loan figure in 2024. Even with that decline, servicing remained a key lifeline for many lenders as production margins stayed compressed.

Average production volume rose to $2.5 billion per company in 2025, or 7,273 loans, up from $2.1 billion (6,259 loans) in 2024. For repeat participants in the survey, average volume increased to $2.4 billion (7,158 loans) from $2.1 billion (6,290 loans).

The average loan balance for first mortgages reached a study high of $371,965 in 2025, up from $357,631 in 2024. Larger loan sizes can help support per-loan revenue, but they also reflect ongoing affordability challenges for borrowers in many markets.

The refinance share of total originations by dollar volume among IMBs increased to 21% in 2025, up from 16% in 2024. For the broader mortgage market, MBA estimates the refi share climbed to 34% in 2025, a 14-point jump from 2024 and an indication that IMBs continued to skew more toward purchase lending than the overall industry.

Measured in basis points, average production income rose to 21 bps in 2025 compared to 10 bps in 2024. Total production revenues — including fee income, net secondary marketing income and warehouse spread — ticked up 2 bps during the year to 347 bps.

MBA’s data suggests that while the worst of the profitability downturn may be over, IMBs remain under pressure to manage costs and improve efficiency. Rising wage and third-party expenses, coupled with weaker pull-through, are preventing lenders from fully benefiting from higher volumes and growing refi activity.

This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication. The system helps convert company announcements and industry data into HousingWire-style news coverage.