How Mortgage Brokers Get Paid: Fees Explained

The Three Payment Models

UK mortgage brokers get paid in one of three ways — and under FCA rules they must disclose which applies to your case before you commit:

• Lender-paid only (fee-free to you) — the broker receives a commission from the lender (called a 'procuration fee', typically 0.3%–0.4% of the loan) and charges you nothing. Common on residential remortgages.
• Broker fee only — the broker charges you a flat fee (typically £300–£750) or a percentage of the loan (rare, usually on specialist cases) and does not take lender commission. Less common in residential.
• Hybrid — the broker charges you a smaller fee (e.g. £195) AND receives a lender procuration fee. Most common model across residential brokers.

None of these models is inherently better or worse; what matters is whether the advice is whole-of-market and properly disclosed.

What a Procuration Fee Is

A procuration fee ('proc fee') is a commission paid by the lender to the broker for introducing a successful mortgage completion. It is typically 0.3%–0.4% of the loan amount — so on a £250,000 mortgage the lender pays the broker £750–£1,000 on completion. It is not deducted from your loan; the lender pays it from their own margin.

Proc fees vary slightly between lenders — which has historically created a bias concern. A broker could theoretically steer you to the highest-paying lender. FCA rules explicitly prohibit this: brokers must recommend the most suitable product, not the highest-paying. But because the range of proc fees is narrow (35bps vs 40bps is a real spread but small in absolute terms), the bias pressure is modest.

Broker Fees: Typical Ranges

Broker fees in 2026 vary by case complexity:

• Simple residential remortgage — £0 to £495 is typical. Many brokers offer fee-free remortgage service because the proc fee alone is sufficient.
• Standard residential with any complication (adverse, self-employed, specialist lender) — £395–£795.
• Buy-to-let — £495–£995.
• Adverse credit / specialist cases — £495–£1,500, sometimes percentage-based (0.5%–1%).
• Commercial or highly specialist — £1,000–£5,000+ or percentage-based.

Beware of brokers charging percentage fees on straightforward residential cases — this is uncommon and usually signals a non-standard broker. A flat fee is the market norm.

When the Fee Is Paid

Most brokers charge the fee either on offer (when the lender formally issues the mortgage offer) or on completion. A few charge a small upfront 'commitment' fee (£50–£195) that is refundable if the case does not proceed, to screen out non-serious enquirers.

Fees charged upfront without a clear refund policy are a red flag. FCA rules do not prohibit upfront fees, but they require clear disclosure of refundability. Read the fee agreement carefully before signing.

What FCA Disclosure Requires

Before you commit to a broker, they must provide an Initial Disclosure Document (IDD) that spells out:

• Whether the firm is whole-of-market or tied to a limited panel
• How they will be paid — lender-only, fee-only, or hybrid — with exact amounts
• When payment is due
• Refund policy if the case does not complete
• Their FCA authorisation and FRN
• Any conflicts of interest

Reading the IDD takes 5 minutes and answers every payment question cleanly. If a broker is reluctant to produce one, walk away.

RemortgageSaver's Role

To be clear about our own position: RemortgageSaver is an introducer under Article 21 of the Regulated Activities Order, not a regulated mortgage broker. We do not give mortgage advice. We collect your details and pass them to an FCA-authorised whole-of-market mortgage broker who does provide regulated advice.

We are paid an introduction fee by the broker for qualifying referrals. This is disclosed on our site and does not change the fee you pay the broker. The broker's own fee structure is whatever they disclose to you in their Initial Disclosure Document when they contact you.