Broker Fees Explained
What is a broker fee?
A broker fee is a fee that a mortgage broker charges the client for their services. Not all mortgage brokers charge fees, but doing so will generally give them better financial power to invest back into their service quality.
Broker fees can be a flat sum, a percentage of the mortgage value, or a mixture of both. It is important to understand the fees a mortgage broker charges so that you can be sure you are happy with using them before you proceed.
When do mortgage brokers typically charge fees?
Mortgage brokers charge at one or more of the following stages of the mortgage process:
- Once they’ve submitted your application
- Once you have received your mortgage offer
- Once you have completed your mortgage
Why do mortgage brokers charge?
A mortgage broker charges upon application because they will have put lots of time into understanding your circumstances and will have searched the market for mortgage options that will work for you. If your mortgage application falls through, at least they receive some payment for their work.
Why we changed how we charge our clients
We used to split our fees 50/50 between submission of an application and receipt of a mortgage offer.
The issue with this system is that the cost of a failed application is transferred to you, the customer. Therefore, we understand why people may be worried about paying fees before receiving their offer.
We're confident in our ability to find the right mortgage for you -meaning we can be sure that an application you make with us will result in a mortgage offer. We are happy to take on the risk and only charge a fee if we have delivered with our service.
If your application doesn't lead to an offer (e.g. due to an issue with the valuation), you would not have to pay us any fees.
What we now charge
We charge a competitive fee of £480, which is below the typical £500 broker fee. We believe this provides great value, given our service quality is rated five-star by over 150 people on Google.
This means we provide the following services completely free:
- Having an initial consultation to discuss your circumstances
- Searching the market to find the best mortgage deal for you
- Presenting these options to you, and talking them through with you, taking the time to answer any questions you may have
- Producing an Agreement in Principle
- Submitting your mortgage application