A mortgage broker doesn't lend you anything. They compare lenders, tell you which deals you are likely to qualify for, and handle much of the paperwork. Whether one is worth using depends on how complicated your finances are and on whether the broker looks across the whole market. Because the titles mortgage broker and mortgage advisor are used interchangeably, the useful questions are about status, fees and access, not the job title.
Broker or advisor: the same rules apply
Any firm giving regulated mortgage advice in the UK must be authorised by the Financial Conduct Authority, whatever it calls its staff. The words broker and advisor tell you little. The firm's status disclosure tells you a great deal, so ask for it in writing at the start. It should say whether the firm is whole of market or limited to a panel of lenders, how it is paid, and whether you are getting advice or only information.
Whole of market, restricted or direct to a lender
| Route | What you see | Watch for |
|---|---|---|
| Whole-of-market broker | Deals from across the market, including some lenders that only deal through brokers | Still check the firm's status and fees |
| Restricted broker | A limited panel of lenders | Fewer options, so ask which lenders are left out and why |
| A lender's own adviser | Only that lender's products | You can't compare, and some lenders only deal direct |
Some lenders deal only through intermediaries and others only direct. That is one reason a mortgage broker can find deals you would never see on a single bank's website, and also why the best mortgage broker UK borrowers find is rarely the one with the biggest advert.
How mortgage broker fees work
- No fee to you. The lender pays the broker a commission, called a procuration fee, when the mortgage completes. It is typically around 0.35% of the loan and can range from about 0.2% to 0.5%. It is paid from the lender's side and isn't added to your loan
- A flat fee. A fixed amount set by the firm and payable at a stage it tells you about
- A percentage fee. A percentage of the loan
Published guidance suggests that where a client fee is charged it commonly runs from a few hundred pounds to around £1,000, or a fraction of a percent of the loan. Fee-free doesn't mean the broker works for nothing, and a fee that is added to your mortgage accrues interest. FCA rules require the broker to disclose fees and commission before you go ahead, and the recommendation must be suitable for you, not simply the deal that pays the broker most.
What a broker will ask for
- Photo ID and proof of address
- Payslips, or for the self-employed the SA302 tax calculations and tax year overviews
- Bank statements, and details of debts and regular outgoings
- Where your deposit is coming from
- Your credit file, which it is worth checking yourself first
Questions to ask before you start
- Are you whole of market, and which lenders don't you use?
- How are you paid, including fees and commission, and can I have it in writing?
- When is any fee payable, and is it refundable if the mortgage doesn't complete?
- Will you recommend a mortgage, or only give me information?
- Who looks after me when my deal ends, for a product transfer or remortgage?
Check the firm
Search the firm on the FCA Register, confirm it has permission for mortgage advice, and contact it using the details shown on the Register rather than those in an advert. If something goes wrong, you can complain to the firm first and then to the Financial Ombudsman Service.
If you are thinking of borrowing against a home you already own, see our guide to home equity loans in the UK. For advice on pensions, investments and protection, our guide to how to find a financial advisor explains the checks.