Sammie Ellard-King
I’m Sammie, a money expert and business owner passionate about helping you take control of your wallet. My mission with Up the Gains is to create a safe space to help improve your finances, cut your costs and make you feel good while doing it.
Quickfire Roundup:
A mortgage advisor (also known as a broker) is a must when it comes to finding the best mortgage deals that suit your personal circumstances.
The good news is that many of the mortgage advisers are free of charge.
Why? Well, they simply take a commission from the lender when the mortgage goes through. That being said, other brokers will charge you a fee too.
Typically, this will be between £200 and £500 but in some cases in can be more.
The first time that I used a mortgage broker, I wasn’t really sure when it came to considering the question, “How much do mortgage advisors charge?”. To my surprise, it was completely free of charge.
I received mortgage advice, got assistance with the paperwork and never had to pay a penny.
I still found myself with a great mortgage deal, and the advisor was more than happy with his fee from the mortgage lender.
Several years down the line, I found myself sitting with the same mortgage adviser and facing a bill of £250 upfront. Times change, and so do mortgage advisor’s fees!
The problem is mortgage processes aren’t easy, and so I have to say that this flat fee was money well spent, as it made the mortgage application process a breeze.
In this article, I will share with you what you should expect to pay when it comes to mortgage broker fees and also consider if fee-free mortgage brokers are worth your time.
Boon Brokers are one of the UKs leading online mortgage brokers. They have a 5-star excellent Trustpilot rating with over 543 reviews.
- No mortgage fees
- Whole of market access
- Free online consultations
- Directly authorised by the FCA
- No in person meet ups
Table of Contents
How much do mortgage advisors charge, and how else do they make money?
Let’s be honest: there’s not much we get for free these days in life.
However, when it comes to mortgage broker fees, these seem to be an exception. While some will charge you, most commonly you’ll come across fee-free mortgage brokers.
A broker helps you to find the best deal, introduces you to the lender, sorts the paperwork and charges the grand sum of zero.
You may think that something sounds a little off, but the reality is that mortgage lenders will pay brokers a fee for each successful mortgage application.
The mortgage market is fiercely competitive and that’s why lenders are more than happy to pay a fee for new business. Don’t worry though, this doesn’t mean that mortgage advisors aren’t independent.
There are plenty of independent mortgage advisors who have access to the whole of market while still benefiting from commission from the lender.
The amount that a lender pays will depend on the loan amount. Usually, it’s a percentage of the total mortgage.
If you’re interested in becoming a mortgage advisor well, it’s a not a bad career as you earn both a salary and a commission, even more if you go out on your own.
A look at the average mortgage broker fee
If you’re not with a fee-free mortgage broker, you’ll want to know what to expect in terms of broker fees. The reality is that mortgage broker charges will vary from one to another.
Some will charge a fixed fee while others will charge depending on the loan size. It’s rare to find any who charge an hourly rate.
Regardless of how mortgage broker fees are structured, on average, you’ll find yourself paying between £200 and £500.
This broker fee may sound like it’s a lot of money, but you need to remember what a trustworthy mortgage broker can do for you.
They can:
- Help you find the best mortgage deal by exploring the whole of market
- Liaise with the mortgage lender on your behalf
- Find you the best interest rates
- Point you towards the right lender if you’re self-employed or have adverse credit
- Save money in the long run with lower monthly repayments
Should I pay mortgage broker fees or stick to fee-free brokers?
If mortgage broker fees aren’t a necessity, should you be doing all that you can to avoid them? The truth is that there’s no black-and-white answer here.
If you’re laser-focused on getting the best deal possible, you know that you need to use a mortgage broker.
Whether you pay a mortgage broker fee or not shouldn’t make any difference: you should still find yourself with the best mortgage deal possible.
Times, when you should expect to pay mortgage broker costs, include:
- When you need a specialist broker – if you’re situation is complicated, such as one or more of the mortgage applicants has poor credit or it’s not easy to prove income, a specialist broker is a must. You can expect to pay a fee for their specialist knowledge
- Your mortgage value is low – higher-value properties and higher loan amounts earn a mortgage advisor more commission. If your mortgage amount is low, they may charge you to top up their fees
Boon Brokers are one of the UKs leading online mortgage brokers. They have a 5-star excellent Trustpilot rating with over 543 reviews.
- No mortgage fees
- Whole of market access
- Free online consultations
- Directly authorised by the FCA
- No in person meet ups
The pros and cons of fee-free mortgage advice online
If you want to avoid financial advisor mortgage fees, here’s a look at the pros and cons of free advice via online brokers:
Pros of fee-free mortgage brokers
- It’s 100% free – yes, this one may be pretty obvious, but mortgage brokers that don’t charge a fee, save you money. This means that you have extra funds to put towards other fees in the home-buying process
- Speed – if you’re using a mortgage broker online, you’ll find the whole process is super speedy. There are claims that they can find your dream mortgage in just 15 minutes
- Availability – when using online mortgage brokers with no fee, there’s no need to book an appointment. You can head go and complete an online form whenever it suits
Cons
- Reduced support – you may find that you can’t just pick up the phone when you need to in the early stages of your mortgage application
- Less bespoke – online mortgage broker fees may be free but they don’t offer the same amount of customisation that you’d get from talking to a mortgage broker face to face
FAQs
How much commission will mortgage brokers usually earn from lenders?
Typically. mortgage brokers will be paid a commission of 0.35% of the total mortgage. This means that if your mortgage was £200,000, they would be paid £700.
What if a mortgage deal fails?
When mortgage brokers rely on commission, they only get paid when a mortgage application is successful. If a broker is going to charge fees on top, you need to check the small print to check what happens to the charges if your mortgage deal falls.
Final thoughts
Whether you use a paid broker or take fee-free mortgage advice to buy your house, the result should be the same: you should still find yourself with the best deals from mortgage lenders that suit your circumstances.
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Disclaimer: Content on this page is for informational purposes and does not constitute financial advice. Always do your own research before making a financially related decision.
