Why Do Some Mortgage Brokers Charge a Fee?

Broker Fee Credit Card


Some mortgage brokers can charge a fee to arrange your mortgage, but you don’t have to feel compelled to use a mortgage broker who charges you a broker fee.

You could save yourself potentially a few hundred pounds by carrying out a bit more due diligence.


Why do mortgage brokers charge a broker fee?


You often find that a mortgage broker will charge a fee dependent on their size, location and the reputation of the mortgage broker.

If you are speaking with a large mortgage broker firm, they may charge a fee because they have offices to run and high overheads (staff) to manage.

Alternatively, a more experienced mortgage broker may feel that they are worthy of charging a broker fee.

London based mortgage broker firms who have a prestigious location are more likely to charge a broker fee but they don’t necessarily do anything differently. There is one way you can check what they do and easily compare one broker to another.


How do I check if one mortgage broker is different from another?


You can check the level of service that your mortgage broker provides by requesting to see their Initial Disclosure Document. This is a document that all mortgage brokers are required to provide a customer before any fees are paid and even before the advice process starts. This document should be the first thing you receive.


If you manage to find a mortgage broker who doesn’t charge a fee, you simply need to check that they are:


Whole of Market ✅

This means that they are able to research the whole of market to offer you their recommendation from the widest possible mortgage selection. Mortgage brokers are required to inform you if they only operate with a select panel of lenders or a single lender.

Independent ✅

An independent mortgage broker is not tied to an estate agency or insurance company and does not have any preferred business arrangements with specific lenders.


Mortgage Brokers will receive a commission from the lender

All mortgage brokers will be paid a commission or procuration fee from the lender if you arrange your mortgage with them as soon as your property purchase/remortgage completes.

This is how mortgage brokers who don’t charge a broker fee manage to operate.

So, if your mortgage broker charges a fee it is likely that they are being paid twice to arrange your mortgage. The broker fee upfront payable by you and then the commission (or procuration fee) paid to them by the lender on completion.


➡ Speak to our fee free online mortgage brokers who are independent and whole of market ✅


Ben - Author


Author: Ben, Glow Mortgage Advisor (CeMAP, BSc Hons)

First Published: 4th December 2017