How Much Does a Mortgage Broker Charge? UK Broker Fees Explained

01Three ways a broker is paid

Model	What you pay the broker	What to check
Commission only ("fee-free")	Nothing directly; the lender pays the broker when the mortgage completes	How many lenders the broker searches
Fee plus commission	A fee, and the broker also receives the lender's commission	The fee in pounds, and when it is payable
Fee only	A fee; any lender commission is passed back to you or set against the fee	Whether commission is offset, and how

The FCA's rules require a broker to tell you, at the start, any fee it will charge and "whether the firm will receive commission from the mortgage lender", and if so whether that commission will be offset against your fee (MCOB 4.4A.8R). The fee-free model has its own guide.

02What a broker fee looks like in pounds

MoneyHelper's typical range for a broker that charges is £300 to £1,000 as a flat fee, or 0.35% to 1% of the amount borrowed. Here is what the percentage range comes to:

Mortgage	At 0.35%	At 1%
£150,000	£525	£1,500
£200,000	£700	£2,000
£300,000	£1,050	£3,000

Arithmetic only: these are illustrations of a published range, not quotes, and many brokers charge a flat fee or a minimum. A higher fee is not, on its own, evidence of a wider search.

03When the fee is payable, and whether you get it back

Brokers take fees at different points: when you apply, when the lender makes an offer, or when the mortgage completes. A fee taken early may not be refundable if your purchase falls through. The broker must tell you when any fee is payable and, if it applies, when it is refundable (MCOB 4.4A.8R), so get that in writing before you agree.

A broker's fee is separate from the lender's own fees, such as a product or arrangement fee, and from valuation, survey and legal costs. Compare mortgage deals on the total cost over the deal period; mortgages explained shows the arithmetic.

04What the broker must tell you first

At the first contact, a broker must explain (MCOB 4.4A.1R and 4.4A.8R):

Its range. Whether it searches the whole market or a limited panel of lenders, and if limited, which lenders or how many.
Its fees. As a cash amount where possible, or as a percentage with an example in pounds.
Commission. Whether it receives commission from the lender or anyone else, and whether that reduces your fee.

05Questions to ask

What is your fee in pounds on my loan, and when do I pay it?
Is any of it refundable if the mortgage does not go ahead?
Do you receive commission from the lender, and is it set against your fee?
Do you search the whole market, and does that include deals only available direct from lenders?
Are you on the FCA Register? Check with our check an adviser toolkit.

06Common questions

Is a mortgage broker fee worth paying?

It depends on the deal the broker finds and the work involved. Compare the total cost of each option over the deal period, including the broker fee and the lender’s fees, rather than the fee on its own.

Do I pay the broker if the mortgage does not go ahead?

It depends on the broker’s terms. Some take nothing until completion; others take a fee at application that may not be refundable. The broker must tell you when its fee is payable and whether it is refundable.

Is the broker fee the same as the lender’s arrangement fee?

No. The arrangement or product fee is charged by the lender for the mortgage deal. The broker fee pays for the broker’s service. You may pay both.

Sources and further reading

About this guide: figures are labelled with their source and date and describe the market, not any firm; illustrations are arithmetic, not forecasts or quotes. This is general education, not regulated advice or a personal recommendation, and FinancialAdvisor.co.uk is not authorised or regulated by the Financial Conduct Authority. Spotted an error? Report it and we will correct it.