BrokerVA
BrokerVA Team · October 30, 2026

The Cost of Turnover in Mortgage Operations: What It Includes and How to Estimate Yours

The Cost of Turnover in Mortgage Operations: What It Includes and How to Estimate Yours

Replacing an employee can cost anywhere from one-half to two times their annual salary, according to Gallup, and mortgage operations adds its own churn from rate cycles that prompt cuts and rehiring. Here is what turnover includes, how to estimate your own cost, and what helps, as part of our guide to lowering your cost to originate.

What Does Turnover Cost?

It depends on what you count. Gallup estimates that the cost of replacing an individual employee ranges from one-half to two times the employee's annual salary, and calls that a conservative estimate. Other estimates run lower: a 2012 Center for American Progress review of 27 case studies found a median of 21% of annual salary, as summarized by Reliamag. The gap comes from what each counts, since direct costs such as recruiting are easy to see and indirect costs such as lost productivity are not.

We couldn't find a reliable mortgage-specific figure for replacing a processor, underwriter, or closer. Rather than quote one, this guide shows you how to estimate your own.

Why Is Mortgage Operations Different?

Because volume swings, and staffing tends to swing with it. An opinion piece in National Mortgage News notes that the STRATMOR Group cites a long-term average annual turnover rate of 30 to 45 percent in mortgage and describes lenders cutting staff when volume dips and hiring again when it rises. That is one source, secondhand, so check it before relying on it.

The scale of the cuts is visible in the data. HousingWire reported that the average number of production staff per company fell from 555 in the second quarter of 2022 to 337 in the first quarter of 2026. And personnel is the largest piece of origination cost: Freddie Mac's 2024 study estimated about two-thirds. Freddie Mac sells digital tools, so weigh its interest, but the point stands: when people are most of the cost, churn in people is costly.

What Does Turnover Include?

Three layers. This breakdown is our description.

Direct costs

  • Advertising, recruiter or agency fees, and screening
  • Interview time from managers and staff
  • Onboarding and training time, including the trainer's time

Indirect costs

  • Workload carried by colleagues while the seat is empty
  • Lower productivity while the new person ramps up
  • More errors and rework during the ramp-up
  • Knowledge that leaves with the person, such as lender quirks, system shortcuts, and broker preferences

Downstream costs

  • Delays in files that wait on the open seat
  • Strain on borrower and partner relationships
  • The risk of further departures when workloads rise

How Do You Estimate Your Own Cost?

With a short exercise. These steps are our recommendation.

  1. List departures from the last 12 months, by role.
  2. Add the direct costs for each replacement: advertising, fees, and interview and onboarding hours at loaded hourly cost.
  3. Estimate the vacancy cost: how many weeks the seat was empty, and who covered the work.
  4. Estimate the ramp-up cost: how long the new person took to reach full productivity, and what the shortfall cost. This is an assumption, so write down yours.
  5. Add rework and error costs you can trace to the transition.
  6. Total it, and compare it to Gallup's range as a check.

For a sense of the range, here is an illustration with made-up numbers, not a benchmark. If a position pays $60,000 a year, Gallup's one-half to two times range implies roughly $30,000 to $120,000 to replace one person. Your own figure, built from the steps above, is the one that matters.

What Does Gallup Say About Preventable Turnover?

That much of it is avoidable. In its research, 52% of voluntarily exiting employees said their manager or organization could have done something to prevent them from leaving, and 51% said that in the three months before they left, neither their manager nor any other leader spoke with them about their job satisfaction or future. Gallup is a consulting firm that sells workplace services, and its findings cover U.S. workers generally, not mortgage specifically.

Our reading is that regular, specific conversations matter. They cost little, and they are one of the few levers that doesn't require a budget.

What Helps Reduce It?

Several practices follow from the above. These are our suggestions.

How Does BrokerVA Fit?

BrokerVA's goal is to lower your cost to originate. Our 150+ mortgage operations specialists are organized into five stage-based roles, Setup, Disclosure, Closing, Funding, and Post-Closing, and we may be able to tailor roles to your business. Accountability for the loan stays with you and your licensed people.

Every client gets a dedicated Coach for a 6-week implementation, then ongoing coaching and regular check-ins, and direct access to our Coaching Team for the VA. We haven't published retention figures, and we won't claim a result we can't support. What we can say is how support is structured. We can't promise a specific saving, since it depends on your operation. On a call, we'll walk through your numbers and show you our cost calculator live. Pricing is customized to your volume and the roles you need. See how BrokerVA works.

Frequently Asked Questions

What does it cost to replace an employee? Gallup estimates one-half to two times the employee's annual salary, and calls that conservative. Other estimates run lower, depending on what is counted.

How high is turnover in mortgage? An opinion piece in National Mortgage News cites the STRATMOR Group's long-term average of 30 to 45% annually. That is secondhand, so check the source.

How do I estimate my own turnover cost? List the last year's departures by role, then add direct costs, vacancy cost, ramp-up cost, and rework, and compare the total with Gallup's range.

Is most turnover preventable? In Gallup's research, 52% of employees who left voluntarily said their manager or organization could have done something to prevent it.

Sources

Want to look at your staffing costs together? Book a call with BrokerVA and we'll walk through your numbers and show you our cost calculator.

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