Most people know they might have to pay a mortgage broker. What's less clear is how much, when, and what exactly you're paying for.
Before you start working with any broker, always ask about their fees upfront. It's completely normal to ask, and brokers must tell you under FCA rules. It also helps everyone operate without surprises and with clear expectations on both sides.
Here's a plainspoken guide to what's normal, what's fair, and when a fee actually makes sense.
What Mortgage Brokers Charge (in the Real World)
Mortgage brokers in the UK get paid in two ways:
1. Commission from the lender
This is the most common model.
- Paid by the lender when your mortgage completes
- Usually ~0.40% of the loan
- Doesn't affect your interest rate
This is why many brokers advertise as "fee-free". They rely entirely on this commission.
2. A fee from you
Some brokers charge a client fee on top of commission. It varies, but you'll typically see:
- £300–£700 fixed fee, or
- 1–2% of the loan amount for complex cases (self-employed, unusual properties, adverse credit)
When the fee is charged:
- Either upfront, or
- At mortgage offer, or
- On completion
A reputable broker will tell you exactly when before they start work.
Why Some Brokers Charge a Fee (and Some Don't)
It comes down to your case and the broker's business model.
Fees are more common when:
- Your income is non-standard
- You're self-employed or have multiple income sources
- You're buying a non-standard property
- You need specialist lenders outside high-street banks
- Your case may take significantly more work
Fee-free brokers are more common when:
- You have clean credit
- You're salaried
- You're buying a standard residential property
- The broker operates at scale and can rely solely on lender commission
Neither model is "better." What matters is the quality of the advice.
What You Actually Get for the Money
Whether the broker charges you or not, good brokers do the same core work:
1. Assess your affordability properly
Lenders all calculate differently. A broker matches your income, debt, dependants, and spending patterns to the right lender.
2. Find the cheapest suitable deal
"Cheapest" isn't always the lowest rate. Sometimes the true cost is about fees, cashbacks, incentives, or flexibility.
3. Handle the admin and application
They package your documents, deal with underwriters, and push things forward when solicitors or lenders slow down.
4. Keep you from falling onto an SVR later
A strong broker diarises your expiry date and helps you remortgage before rates jump.
5. Deal with problems quietly
Missing payslips, complex bonus income, gift letters, survey issues — they absorb the friction so you don't have to.
When a Fee Is Worth It
Paying a broker can be good value when:
- You have unusual income
- You've been declined before
- You're on a tight deadline
- You're using a government scheme
- You're buying a new build with incentives
- You're self-employed with fluctuating income
In these cases, you want the broker who knows the lenders, not the one who happens to be free.
When a Fee Isn't Necessary
If you're a straightforward first-time buyer with PAYE income, clean credit, and a standard property, a fee-free broker may be entirely suitable.
Many excellent fee-free brokers handle these cases well and earn their income from lender commission alone.
Red Flags to Watch Out For
You should pause if a broker:
- Can't explain why they're charging a fee
- Asks for full payment before any work begins
- Won't show you alternatives
- Pushes one lender without reasoning
- Charges a percentage fee for a very simple case
Ask for their Initial Disclosure Document (IDD); every regulated broker must provide it.
Final Thoughts
A broker's fee is only one part of the picture. What matters is whether they help you:
- borrow what you need
- at a fair total cost
- with a smooth journey
- and without future surprises
If you're unsure, speak to one or two brokers. A short conversation usually makes the value clear.