how much does a mortgage advisor cost? 

February 8, 2024

260
The cost of using a mortgage advisor (or mortgage broker) can vary widely depending on the services provided, the complexity of your mortgage needs, and the advisor’s payment structure. Here are the main ways mortgage advisors may charge for their services:

Fee-Free Mortgage Advisors

Some mortgage advisors do not charge the borrower any fees because they receive a commission from the mortgage lender once the mortgage is successfully arranged. Despite the term “fee-free,” it’s important to ensure that the advisor is recommending the best mortgage for you and not just the one that pays the highest commission.

Fixed Fees

A mortgage advisor may charge a fixed fee for their service. This fee can range from a few hundred to several thousand pounds, depending on the complexity of your mortgage requirements. Fixed fees are agreed upon upfront, providing clarity on costs from the start.

Percentage Fees

Some advisors charge a fee based on a percentage of the mortgage amount. This can typically range from 0.3% to 1.0% of the mortgage value. For example, on a £200,000 mortgage, a 0.5% fee would amount to £1,000. This method can become quite costly for larger mortgages.

Hourly Rates

Though less common, some mortgage advisors charge by the hour. Rates can vary, but expect to pay between £50 to £200 per hour, depending on the advisor’s experience and location.

Combination

In some cases, advisors might use a combination of these methods. For instance, they might charge a fixed fee and also receive a commission from the lender.

Key Considerations

Transparency:

Advisors should be transparent about their fees and how they’re paid. The Financial Conduct Authority (FCA) requires mortgage advisors to disclose their fee structure and any commission they receive.

Value for Service:

Consider what services the advisor provides for their fee. This can include access to a wide range of mortgage products (including some not directly available to the public), handling paperwork, and providing advice tailored to your financial situation.

No Sale, No Fee:

Some advisors operate on a “no sale, no fee” basis, meaning if the mortgage application is unsuccessful, you don’t pay a fee. Before engaging a mortgage advisor, it’s wise to shop around and compare the services and fee structures of different advisors. Ask for recommendations, check online reviews, and ensure they are authorised and regulated by the Financial Conduct Authority. Clear understanding of the costs involved and the value they bring to your mortgage search can help you make an informed decision on whether using a mortgage advisor is right for you.

Answered by:

Alison Gibson

Mortgage and Protection Adviser

Last Updated:

18.06.2024

Answered by:

Alison Gibson

Mortgage and Protection Adviser

Last Updated:

18.06.2024

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