How Do Mortgage Brokers Get Paid?
Mortgage advice can sometimes feel confusing, and one of the most common questions we hear is: “How do mortgage brokers get paid?” This guide explains how brokers earn money, what fees you might pay, and how our own fee structure works.
In this article:
Author: Pete Mugleston
CeMAP Mortgage Advisor, MD
How do mortgage brokers get paid?
Most mortgage brokers are paid by a combination of commission from the lender (also called “procuration fees”) and fees charged directly to the customer. When a mortgage completes, the lender pays the broker a commission. This payment comes from the lender, not from your loan or your monthly payments. Some brokers also charge a fee for the work involved in advising on and arranging your mortgage. The amount varies by broker and the complexity of your case.
A broker’s income can depend on:
- the loan size
- the complexity of your situation
- whether the broker works across the whole market or a limited panel
Do mortgage brokers charge fees?
Some brokers do, but not all.
A broker’s fee typically covers the work involved in:
- assessing your affordability
- searching the market for suitable lenders
- presenting your application in the best way
- liaising with lenders and solicitors
- guiding you from application to completion
Some brokers charge an upfront fee before starting work. Others charge on application, offer a fixed fee, or charge on completion only. And some brokers are fee-free for certain types of customers.
How much do mortgage brokers charge?
There’s no standard fee across the industry. Brokers set their own charges, and they can vary widely.
- Simple cases may attract a lower or zero fee
- More complex situations, such as bad credit, high LTV, unusual income, or specialist mortgages, often require significantly more work, and fees can reflect this
- Some brokers charge upfront; others only charge if a mortgage completes
A fee for a complex case can be well over £2,000, depending on the broker and the work required.
Before you agree to anything, you should always receive a clear fee disclosure document explaining what you’ll pay and when.
At Online Mortgage Advisor, we’ll never charge a fee without explaining it first. Your advisor will break down all costs at the start of your journey, so you know exactly what to expect.
Our fair fee policy
Our fees are based on the complexity of your situation and the amount of work required. If your mortgage isn’t approved, we’ll refund the fee, provided the information you provided was accurate and complete.
Are there fee-free mortgage brokers?
Yes. Some brokers do not charge customers for certain types of mortgages. Instead, they rely on the commission paid by the lender upon completion of the mortgage.
Fee-free brokers typically work best for customers with:
- straightforward applications
- clean credit histories
- easily verified income
- larger deposits
- lower-risk criteria
More complex situations typically require specialist expertise, which is where fee-charging brokers are more common. We offer fee-free advice on straightforward cases.
Your advisor will confirm during your first conversation whether your situation qualifies.
Secure The Best Mortgage With Help From Our Experts
Get a free consultation from a mortgage advisor today
-
Tailored advice from an expert
-
Get the best deal available for you
-
Save more with our partner services
Fee-free vs paid brokers: which is best?
There’s no universal answer; it depends on your circumstances.
Fee-free brokers may suit you if:
- Your situation is simple
- You have strong credit
- Your income is easy to verify
- Your case is low risk
Paid brokers may suit you if:
- You have bad or complex credit
- You’re self-employed or have a variable income
- You need a high LTV mortgage
- You have an unusual property
- You want a specialist who handles cases like yours every day
A paid specialist may also save you money overall by securing a lower interest rate or avoiding unsuitable recommendations.
Whether you pay a fee or not, the most important factor is choosing a qualified, whole-of-market broker you trust. All OMA advisors are fully FCA-qualified mortgage experts.
Are there different types of mortgage brokers?
1. Tied or restricted brokers
They work with a shortlist of lenders or may be owned by a lender. Their recommendations are limited to that panel.
2. Whole-of-market brokers
They can consider a much wider range of lenders and are less restricted in the options they can offer.
3. Specialist brokers
These focus on specific scenarios (e.g., bad credit, buy-to-let, self-employed).
4. Niche Brokers
Such as overseas property brokers, second-charge specialists, or shared-ownership brokers.
Our advisors are whole-of-market specialists. That means they consider a wide range of lenders and search the market to find the most suitable mortgage available to you.
How do mortgage brokers earn their money?
A broker earns money by providing regulated mortgage advice and arranging the mortgage. Their work typically includes:
- calculating affordability
- comparing products from across the market
- assessing lender criteria
- preparing and presenting your application
- guiding you through the process
- helping you understand the risks and terms
- liaising with lenders and solicitors
- supporting you through to completion
A broker’s role is to recommend the most suitable mortgage based on your circumstances. This recommendation must be in your best interests.
Do mortgage brokers lend money?
No. Brokers do not lend money. Their role is to help you find the right lender and the right mortgage.
Related Articles
FAQs
No. Second-charge mortgages are charged the same way as first-charge mortgages, with fees varying by broker and case complexity.
Some brokers request their fees be paid upfront, whereas others request payment once a mortgage application has been successfully approved.
In many instances, mortgage broker fees are paid by the lender at no cost to you, but it’s always important to be clear on when your mortgage broker will be paid and whether or not the cost is chargeable to you.
Not necessarily. If a broker fee is added to a mortgage (in the case of a remortgage), the broker’s fee is paid to your lender, which is transferred to the broker along with their commission.
This should be set out in writing. For upfront or success fees, these are typically transferred directly to the advisors’ company. Any queries regarding fee payment should be directed to the company compliance department.
Always be clear on how you pay your broker. If you feel unsure about the cost of your fee and how your broker came to that amount, ask them for a detailed breakdown.
If you feel dissatisfied with the service you have received from your broker, it’s always a good idea to raise the issue before payment, if possible.
However, if you have already paid your fee and later feel you were mis-sold a product or recommended a lender that wasn’t suitable for you, you have every right to complain.
Another point to remember is that before signing a mortgage broker agreement with your mortgage broker, always check their refund policy. If this isn’t stated within their contract or they don’t have a refund policy, it may be worth asking them to include one.
It depends on your circumstances. For complex cases (bad credit, self-employed, low deposit), a specialist broker’s expertise can be invaluable and may help you access better rates that offset their fee. For straightforward applications, a fee-free broker may be sufficient.
Ready to get started with a mortgage broker?
OnlineMortgageAdvisor works with over 100 lenders with access to thousands of mortgage products including exclusive products that you can’t access directly, giving you access to some of the most competitive rates available.
- Whole of market access – Our advisors have access to a wide range of lenders and products
- Specialist knowledge – Expert advisors for every type of mortgage situation
- Proven track record – Highly rated by our clients
Call 0330 818 7026 or make an enquiry to get started with OnlineMortgageAdvisor today.
Pete Mugleston
CeMAP Mortgage Advisor, MD
Pete, a CeMAP-qualified mortgage advisor and an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete successfully went the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained and his love of helping people reach their goals led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!
Superb response and knowledgeable advisor
Steve, the financial advisor, contacted me within the hour and was very friendly, knowledgeable and professional. He seemed to relish my non standard requirement, diligently kept me updated during the day and we struck up a great relationship. Very impressed.
Peter Costello
Knowledgeable and Supportive
The team were fantastic and really knowledgeable and supportive. They answered all questions promptly and came back to me with regular updates. I have already recommended them and will use them again.
Dorothy
Prompt and Professional
A very prompt and professional service. The advise and guidance has been so valuable as a first time buyer.
Ayesha