Mortgage broker feesL&C is a fee free mortgage broker, but we’ve put together this guide to help you understand the different ways mortgage brokers and advisers can charge for their service. When you go to a mortgage broker to help you choose and apply for a mortgage, it’s important to understand whether or not you will have to pay for this advice. Almost all mortgage brokers are paid commission by the lender, usually of between 0.35% and 0.4 % of the total mortgage. Some mortgage brokers also charge a fee to their customers.
Mortgage brokers generate income in several different ways:
- Fee free. Like all other brokers, we’re paid a commission directly by the lender once a mortgage completes. Unlike many other brokers, we simply choose not to charge our customers a fee on top of this. That means you don’t have to pay us a penny for our mortgage service. Once we’ve recommended a particular mortgage, you will receive an illustration document known as an ESIS (European Standardised Information Sheet), which will tell you about any costs relating to the mortgage. Similarly, if you are buying insurance from us, you will receive a quotation which will tell you about any other fees relating to the policy you are buying, but you won’t be charged for the advice you receive.
- Fixed charge. You might be charged a fixed fee, e.g. £499, for mortgage advice.
- Percentage. Some brokers charge a percentage of the mortgage you are taking out. For example, if you need a £250,000 mortgage, and their fee is 1%, you will have to pay a £2,500 charge.
- A combination. Some brokers will use a combination of the charges mentioned above. So, for example, they might receive commission from the lender, but will still charge you a fee on top.
Always check with any broker you are considering using how much you will be charged and make sure you have this information in writing before you proceed. Even though we at L&C don’t charge you any fees, we will always let you know exactly how much we will receive in commission from the lender.
As well as understanding how much you’ll have to pay for mortgage advice, you should always check with a broker whether the advice they offer is restricted or not. If it is restricted, that means they will only be able to offer you mortgages from one or just a few lenders.
At L&C we’re not tied to any particular lender or a limited selection of lenders which means we can look across the mortgage market to help you find the right deal to suit your needs.