Why Use a Mortgage Broker?
Mortgage brokers have access to a wide range of lenders and products, many of which aren't available directly to consumers. They understand the nuances of different lenders' criteria and can match your circumstances to the right lender, increasing your chances of approval and potentially securing a better rate.
Brokers are particularly valuable if your situation is anything other than straightforward. Self-employment, adverse credit, unusual property types, or complex income structures all benefit from expert guidance. Even with a straightforward application, a broker can save you the time and effort of comparing deals yourself.
Whole-of-Market vs Tied Brokers
A whole-of-market broker can search deals from across the entire UK lending market, giving you the widest possible choice. A tied or multi-tied broker only has access to a limited panel of lenders, which means they may not find the absolute best deal for you.
Always ask a broker whether they're whole-of-market or panel-based, and how many lenders they have access to. FCA regulations require brokers to tell you how many lenders they cover. For the best chance of finding the optimal deal, a whole-of-market broker is generally preferable.
Understanding Broker Fees
Mortgage brokers are paid in one of three ways: a fee charged directly to you, a commission (procuration fee) paid by the lender, or a combination of both. There's no single best model — what matters is the total cost of the advice and the mortgage combined.
Fee-charging brokers typically charge between £300 and £500, though some charge more for complex cases. Fee-free brokers rely entirely on lender commission, which is usually around 0.3% to 0.4% of the loan amount. Ask upfront about all costs and make sure you understand when and how the fee is payable. A good broker should explain their fee structure clearly and without hesitation.
Questions to Ask Before Choosing a Broker
Before committing to a mortgage broker, ask these important questions:
- Are you whole-of-market, and how many lenders do you cover?
- What are your fees, and when are they payable?
- Are you regulated by the Financial Conduct Authority (FCA)?
- Do you have experience with situations like mine (self-employed, adverse credit, etc.)?
- How will you communicate with me during the process?
Check the broker's FCA registration on the Financial Services Register. Read online reviews, but be aware that review platforms can be manipulated. Personal recommendations from friends, family, or trusted professionals are often the most reliable way to find a good broker.
Important: Your home may be repossessed if you do not keep up repayments on your mortgage. There will be a fee for mortgage advice. The actual rate available will depend on your circumstances. Think carefully before securing other debts against your home.