Mortgage Broker Costs
Moving house and looking for the best deal on a mortgage? SpotDif’s mortgage broker fee comparison makes it easy.
Mortgage broker prices: all you need to know
Are you looking for a mortgage but don't know where to start? A mortgage broker can help you find the most competitive rates and mortgages, whatever your credit rating. At SpotDif, we'll help you with mortgage broker costs so you can make an informed decision on the broker you choose — and ultimately get the best deal.
A mortgage broker acts as your go-between for lenders and borrowers. They gather information on your employment, assets, and credit score to secure financing for your new home. So, how much do mortgage brokers cost? As a general rule, broker fees are between 0.3% and 1% of your total mortgage — we’ll look at this in more detail later on.
Is the mortgage broker's cost worth it? Well, one of the big advantages of working with a broker is their ability to match you with a mortgage, especially if you've had trouble getting finance in the past. Your broker will have access to specialist loans that high-street lenders can't match. They also save you time, money, and effort while you organise the rest of the move.
At SpotDif, we aim to demystify the process of getting a mortgage by matching you with the right mortgage broker for your needs. With our handy comparison tool, you're just a few clicks away from meeting your ideal mortgage broker and financing your forever home or a buy-to-let property.
What is the standard fee for a mortgage broker?
Before you sign any contracts, it’s wise to get a general idea of what you can expect to pay for mortgage brokerage services.
Mortgage broker fees are generally based on loan size and can be anywhere from 0.3% to 1% of your mortgage. For a £200,000 mortgage, expect to pay between £600 and £2,000.
Prior to committing, get a written quote of your mortgage broker cost. Also, if the deal falls through, get it in writing that there are no fees to pay. Remember, the mortgage broker's price should save you money over the long term.
Do mortgage broker costs vary?
It’s also worth noting that mortgage brokers' fees may vary, and each advisor has a unique fee structure. Some charge no fees but accept a commission from the lender, while others take a fee and a commission.
Your mortgage broker price consists of the following:
Mortgage broker fees for finding a mortgage
The procuration fee paid by the lender when the mortgage completes
Ask for a mortgage broker fee agreement, and bear in mind that complex loans take more time to arrange. If your case is straightforward, check whether your broker charges a fixed fee.
Remember, mortgage broker fees are negotiable. It's worth testing their negotiating skills to check whether they're doing the best job.
Mortgage broker fee breakdown
Various factors impact your mortgage broker fee in the UK. Knowing the different types of fee structures is the best way to decide about the right broker for you.
The different mortgage broker price models include:
Hourly rate brokers
If your case is straightforward, this could be a way to keep fees down. Unfortunately, hourly fees can quickly escalate if your mortgage hits a snag. It's essential to get an estimate for the number of hours your mortgage is expected to take.
Fee-free brokers
This is a cost-effective solution if you’re moving home on a budget. Your mortgage broker will charge lenders a commission instead of charging you any fees.
You'll still get the expert help and advice you need without paying a penny, representing a considerable saving.
Fixed charge brokers
Brokers charging a fixed fee are generally more transparent in their approach. Still, it pays to check that no additional costs will be charged.
A fixed-fee mortgage broker generally charges between £300 and £600. The mortgage broker fee, on average, is £500.
You’ll pay your mortgage broker fees either upfront or on completion of your mortgage.
Percentage fees
If you decide to pay fees as a percentage, expect to pay between 0.3% and 1% of your mortgage.
But beware. If you're buying a higher-value property, you could end up paying significantly more than the average mortgage broker cost amount.
Combination fees
You might find that your mortgage broker combines several approaches. For example, they might get a lender’s commission while also charging you an hourly rate,
This fee model mitigates the risk of clients changing their minds and dropping out of a sale.
How a mortgage broker can save you money
A mortgage lender's job is to get you the best available deal, saving you time and money with a customised solution. Choosing your mortgage broker is the first step to getting a fantastic deal on your next mortgage.
Here's what you need to ask:
Are you a whole-of-market broker with access to every available mortgage?
Can you tell me about direct-only mortgages direct from lenders?
What are your fees and charges? And do you have a breakdown in writing?
What’s included in your service? Do you do all admin and chase up lenders?
Will you talk me through the pros and cons of each deal and advise me on the best deal for my budget?
Can you advise me on other products like life insurance?
Once you’ve used our mortgage broker fee comparison to find a financial advisor, here’s how they can save you money:
Access to lenders
Your mortgage broker works across a network of multiple lenders. As a result, they can access products you wouldn't find otherwise, tailored to your budget and needs. Additionally, a broker is more likely to find a mortgage with favourable lending terms and interest rates.
Negotiation skills
Mortgage brokers can exercise negotiating power in a way that you can't. Their deeper understanding and expertise help you secure the best possible rates and payment terms, potentially saving thousands of pounds.
Bespoke advice
Your mortgage broker takes time to understand your financial position. In turn, they'll use that information to find specific products that match your needs. This customised approach means you're not paying for extras that you don't need. Your broker will continue to support you until the deal is complete.
Improved chance of approval
If your bank has turned you down, try a mortgage broker. Their access to whole-of-market financial products means there's a higher chance of finding a mortgage you'll be approved for. Also, having an experienced professional on your side delivers peace of mind that you're getting the best deal.
Cost savings
You might assume your mortgage broker's cost will add to your overall outgoings. Yet, using a mortgage broker could save you money in the long term. Their in-depth market knowledge means you'll secure the best rates and products available, which could save you a significant amount over the life of the mortgage.
Find the best mortgage broker with SpotDif
Are you looking for a mortgage? Buying a home is a massive investment, and financing your move can be daunting. If you’re overwhelmed by choice or need expert advice, paying mortgage broker fees could help you make significant long-term savings.
At SpotDif, we're committed to helping you find the best deal on mortgage broker costs in your area. We aim to give you the information you need to make an informed choice. We'll ask for a few details that make comparing mortgage broker fees straightforward. So, you find the best person for the job as you start out on your home-buying journey.
Compare trusted mortgage brokers near you, and get ready to find your new home.
Last updated on 25 Sept 2024