IMBs posted their best production profits in four years, yet margins stayed fragile
Independent mortgage banks ended 2025 in better shape than they started it, posting higher per‑loan profits and stronger overall performance. However, the recovery remained fragile and heavily dependent on cost discipline and servicing income, according to new data from the Mortgage Bankers Association (MBA).
IMBs and mortgage subsidiaries of chartered banks recorded an average profit of $785 on each loan they originated in 2025, up from $443 in 2024.
Average net production income climbed to 21 basis points, the highest level in four years but still less than half the 45‑basis‑point average recorded since 2008.
“The average net production profit for IMBs in 2025 reached its highest level in four years at 21 basis points,” said Marina Walsh, CMB, 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.”
Broader volumes up, but so were costs
MBA’s 2025 Annual Mortgage Bankers Performance Report showed average production volume per company rose to $2.5 billion, or 7,273 loans, up from $2.1 billion and 6,259 loans in 2024.
The average first‑mortgage loan balance hit a study high of $371,965, while the refinance share rose to 21% of IMB volume, compared with 16% a year earlier.
“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.”
Total production revenues ticked up to $11,879 per loan in 2025, from $11,520 in 2024, but expenses also edged higher to $11,094 per loan.
Those cost pressures mirrored what other industry benchmarks have shown, with recent MBA quarterly reports finding that many IMBs only modestly improved profitability as higher wage and vendor costs offset better volumes.
Servicing income as a safety net
Including production and servicing, 78% of firms in MBA’s study posted pre‑tax net financial profits in 2025, up from 68% in 2024 and 36% in 2023.
Without servicing, the share of profitable firms would have dropped to 64%, underlining how mortgage servicing rights and fee income continued to anchor earnings even as net servicing financial income slipped to $89 per loan from $301 in 2024.
The pattern fits a longer trend seen by IMBs since 2022, when MBA data showed rare net production losses and pushed many lenders to lean more heavily on servicing gains and expense cuts to stay in the black.
IMBs responded by pivoting into channels and products that offered more stable margins, from wholesale and broker‑driven production during the 2023–24 surge in broker share to renewed interest in second‑lien and HELOC offerings as borrowers tapped record home equity.
For 2026, MBA’s baseline outlook calls for only gradual rate relief and steady but unspectacular origination growth, suggesting that IMBs would need to keep squeezing efficiencies from operations rather than betting on a volume boom to rescue margins.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
