How Much Do Mortgage Advisors Charge?

When applying for a mortgage, keeping costs down is a good idea, and that’s the brilliance of using a mortgage broker because it’s their job to compare deals and save you money.

But what fees do mortgage brokers charge, and how do you know the typical fees for a mortgage broker in the UK?

This article answers all these questions and more. Click the topic below for more information, or read on.

Do mortgage brokers charge a fee?

Yes, in the majority of cases, a mortgage broker will charge a fee for their services, which can include:

• Comparing the whole of the market to find you the best deals
• Calculating your affordability to find you a cost-effective mortgage
• Negotiating your mortgage terms and conditions
• Managing and filling out your paperwork
• Overseeing your mortgage application and ensuring all deadlines are met
• Comparing the range of mortgage products that may be better suited to your needs

How much do they charge?

It depends on the broker you use and when they require payment. Some fee-charging mortgage brokers do ask for upfront payments directly from the customer before they begin their search for lenders and these fees can range anywhere between £300 to £600, although this isn’t always the case.

In addition, there are mortgage brokers who charge a flat fee with a fixed rate; this rate is billable whenever mortgage advice or their services are provided.

This can result in the cost of mortgage broker fees accumulating, so always be clear on how much you will be charged ahead of seeing a mortgage broker.

Many of the brokers we work with are only paid on completion through lender commission, and those who charge a fee will refund the upfront costs if they fail to get you a mortgage.

Fees for extra time

Some applicants may have circumstances that make finding a lender slightly harder, and some brokers will charge for the additional time needed to secure a mortgage. A borrower may not have fully disclosed their financial situation or have perhaps accidentally left out information that could prevent a successful mortgage.

This can cause delays and may require the mortgage broker to complete further paperwork or conduct additional research.

To avoid unexpected charges, a good tip is to always read your mortgage broker fee disclosure form before signing.

What sets us apart is that we only work with brokers who charge when a mortgage is successful. Whatever your circumstances, a mortgage shouldn’t get in the way of you getting on the property ladder or finding your next home.

Are second-charge mortgage broker fees any different?

No. It shouldn’t make a difference whether the mortgage product you’re applying for is a first or second-charge debt. Either way, the broker involved will still charge you the same way, and 0.3-1% of the loan amount is a standard fee.

What is a mortgage referral fee?

To encourage mortgage brokers to recommend certain lenders, some banks and mortgage providers offer an incentive in the form of a mortgage broker referral fee.

Although mortgage broker referral fee agreements can vary at the discretion of each lender, lenders usually pay brokers a percentage of the mortgage or a minimum commission payment.

In this day and age, commission is the norm and referral fees are virtually non-existent.

Can brokers pay this fee?

Yes, some mortgage brokers pay referral fees to estate agents if that estate agent recommends their services.

However, in recent years the government has introduced new measures which encourage brokers and estate agents to be clear with their customers when a mortgage broker referral fee agreement occurs.

Research by the Council of Licensed Conveyancers found that a shocking 59% of those who took a recommendation did not know whether or not the estate agent or broker was paid a referral fee.

Recommendations from a professional can be extremely helpful. Unfortunately, some agreements can result in a lack of choice for customers, especially those who may have felt pressured to use the suggested lender, estate agent, or broker.

Any good broker knows that to truly find the best deal for a borrower, they need choice, which is why the brokers we work with are independent and do not have ties with specific lenders or estate agents.

Are there any other fees?

Some advisors charge customers extra fees, which can be frustrating for many borrowers who already have many other expenses to pay, such as stamp duty, removal costs, and financial advisor mortgage fees.

While every broker will charge different amounts, they could include all, some, or none of the following extra charges:

• Mortgage broker finder fees
• Underwriting fees
• Mortgage broker application fees
• Cancellation fees

Some fees won’t reflect in your final bill and are exclusively for the broker themselves. Every mortgage broker within the UK must either be regulated by the FCA (Financial Conduct Authority) or be the agent of a regulated firm and pay a fee to be regulated.

To avoid the shock of acquiring extra fees, get in touch. The expert advisors we work with will be clear about the fees they charge, or we can pass you to a broker who won’t charge a fee, should your circumstances allow it.

Are there fee-free mortgage brokers?

‘No fee’ mortgage brokers do exist, and some people can find this to be a cost-effective solution. A majority of brokers will receive a commission payment from your lender once the mortgage is completed. However, the difference is that these brokers will not charge you a fee on top of this.

We work with a select number of fee-free brokers, but we will only introduce you to them if they are the right advisors for your needs and circumstances.

Fee-free vs paid broker: which is best?

It entirely depends on your circumstances, the fee you’ve been quoted, and if the broker can shave off any lender fees.

While a free broker sounds great, unfortunately, some unethical brokers may take advantage. In a worst-case scenario, a broker may actively recommend that a borrower take out an unsuitable mortgage with a lender if they can earn more commission through them.

Fee-free brokers are typically reserved for applicants with less complex needs, for example, with perfect credit, have easy-to-prove income, and can put down a higher deposit. Those with more complex needs (such as buy-to-let applications, low deposit or bad credit) may need a more experienced broker specialising in bad credit mortgages.

Even if you plan to buy a very cheap property, if your loan-to-value is high (for example, you need to borrow 95% of the property’s value), your application may still be considered higher risk.

By paying to work with a broker, not only will you benefit from their unparalleled expertise, but they could also potentially grant you access to more competitive products.

Whether you pay or not, working with an experienced, competent, trustworthy mortgage broker can help you find your dream mortgage. The brokers we work with are all fully qualified by the Financial Conduct Authority (FCA), and they are best set to give you trusted advice.

Is there a mortgage broker fee calculator I can use?

These exist online but aren’t recommended.

Preparation is key when trying to find a mortgage, so it can be a good idea to know when to pay mortgage broker fees and the costs you may have to pay before starting the process, even if you have a low-fee mortgage broker.

Some people search for online mortgage broker fee calculators, which can provide a quick snapshot of what they might expect to pay. The only thing to consider is that an online tool won’t be intuitive and, therefore, can’t take your unique circumstances into consideration.

For example, after speaking with you, an advisor will know the type of mortgage broker you need, whereas a calculator won’t.

There are many specialist brokers, ranging from bad credit brokers to lifetime mortgage brokers to self-employed specialists, and each may charge their own fees.

Having the right expert on your side can be the difference between a successful mortgage application and a mortgage rejection, so getting the right broker for your situation is important.

It can be quicker and more efficient to talk to an advisor who can listen to your needs and recommend a broker who matches those expectations. They will also be clear on costs so there are no unexpected fees later.

When do you have to pay a mortgage broker?

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.

Are mortgage broker fees negotiable?

Like most costs in life, mortgage broker fees can be negotiable. There will be circumstances when fees are fixed, especially if you choose to work with a fixed-fee mortgage broker, but that doesn’t mean that there won’t be opportunities to save money.

In fact, brokers pride themselves on their negotiation skills, which enable them to find you the best deal and keep your mortgage costs down.

Can I get a refund on my mortgage broker fee?

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.

Do mortgage brokers offer cashback?

A broker can arrange a cashback mortgage for you, though not every lender will offer this. By opting for a cashback mortgage, you’ll be paid a lump sum upon completion to help cover any necessary expenses, including legal fees, stamp duty, removals, home repairs, or even buying new furniture.

The brokers we work with can compare cashback mortgages on your behalf using their ‘whole-of-market’ access to ensure they find you the best deal possible.

Where can I find an independent mortgage broker?

There are also independent fee-free mortgage brokers. These can provide you with an all-rounded service that puts you at the centre of every decision.

Working with an independent fee-free mortgage broker can give you peace of mind, knowing that the deals you’re being shown are the best in the UK and also provide great value for money.

The advisors we work with can put you in touch with the whole of market no-fee mortgage brokers in:

• Coventry
• Liverpool
• London
• Leeds
• Huddersfield
• Bristol
• Manchester
• Sheffield
• Nottingham
• Worthing
• Northampton
• Edinburgh
• Glasgow
• Exeter
• Scotland
• Leicester
• Bolton
• Wirral

To speak with one of the best fee-free mortgage advisors in the UK, make an enquiry online.

Speak to an expert

If you’re still wondering who pays the mortgage broker fees or how much a mortgage broker costs, call 0330 818 7026 or make an enquiry to speak with an advisor.

The advice you receive is always confidential. We understand the importance of finding a broker you can trust, and we only recommend carefully vetted professionals.