How much do mortgage advisors charge?

How Much Do Mortgage Advisors Charge?

Mortgage advisors charge fees in a variety of ways, so it is important ask them the question from the outset. Here are the different ways they may charge.

  1. Fixed Fee
  2. Fee Free
  3. Hourly Rate
  4. Commission
  5. Percentage
  6. Combination

There are, however, a number of different options out there so it is important to discuss these with your mortgage advisor first.

Fixed Fee

Your adviser will agree to arrange your mortgage for a fixed amount of money. This should be agreed in writing so there isn’t any room for dispute.

Fee Free

Not all mortgage advisors charge for their financial advice. At GIGLY, we only work with independent financial advisors who do not charge customers a penny for their service.

Instead of charging customers we get a percentage of the procuration fee from the lender if the mortgage goes through. It’s important to note, that all financial advisors get this fee, some just happen to charge an additional brokerage fee on top. Some advisors work on the basis they charge a fee but they refund the proc fee to the client (see Combination below).

Hourly Rate

Some advisers will charge per hour so you should have an estimate upfront of how long it is likely to take for the advisor to find you a mortgage and guide you through the application process.

Commission

All mortgage brokers receive a commission in the form of a procuration fee from the lender once a mortgage has completed. Fee free mortgage brokers use the procuration fee as their primary income source and do not charge an additional fee on top of the procuration fee. Make sure you ask about it right at the start and check if the broker you are talking to is on a limited panel or is whole of market.

Percentage

Some advisers will charge you a percentage of your mortgage. For example, if you agree a 1% charge for a £300,000 mortgage, the fee will be £3,000. Some advisers will cap fees to a certain percentage.

Combination

Some advisers will charge fees but still receive commission. Others will charge fees, but agree to cap them at a percentage of the mortgage.

There are a number of mortgage advisor combination fee options;

  1. An adviser will charge fees for researching the market and providing advice payable from the onset and receive a commission from the lender
  2. An adviser will charge a fee when you apply for the mortgage and then refund any commission they receive from the lender.
  3. An adviser will charge a fee on receipt of your mortgage offer and then refund any commission they receive from the lender.
  4. An adviser will charge a fee on completion of your mortgage and then refund any commission they receive from the lender.

How much?

As mentioned above, a mortgage advisors fees can be charged a number of different ways and are determined by the size of the mortgage. On average, mortgage advisors are generally paid around £500 – £600 for their fixed fee, with other costs – such as percentage of the loan added after completion.

When Do I Pay My Fees?

Mortgage advisors can be paid at different times. At your first consultation, they should thoroughly communicate with you at which point in the application process you are expected to pay and the exact costs.

Liability

If you have received advice from a qualified mortgage advisor and any such problems arise after this service and can be directly linked to the broker’s service, you can be confident that the liability will not lie with you.

Ultimately, this is why it is so important to use a mortgage advisor when applying for a mortgage. Their advice and experience are invaluable. 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.

Read our blog on 9 reasons to get independent mortgage advice.