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Charging broker fees

Journalist: Jake Carter, Mortgage Introducer

ended 23. June 2023

A large proportion of mortgage borrowers agree that brokers are entitled to charge fees, new independent research conducted on behalf of Boon Brokers has found.

Why do you charge fees/ why do you not charge fees? 

What are your views on brokers charging fees?

What are the pros and cons of charging a fee for a brokerage?

Have you seen a correlation between charging a fee and attaining more consumers?

13 responses from the Newspage community

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Bob Singh
Founder at Chess Mortgages
One of the most successful brokers in the UK is fee-free. They handle huge volumes and have a high staff turnover rate. Staff learn the ropes and set up on their own.

Whether or not you charge fees very much depends on your positioning based on experience, qualifications service and niche.

Mainstream fee free advisers I feel undervalue themselves as professionals or they have low operating costs so want an easy life doing £5/10k pm. You don’t see many 2nd charge brokers getting out of bed for less than £2500!

As a brokerage we adopt a flexible approach and charge a fee based on the size, speed and complexity of the case.
For high value cases we may not always charge a fee depending on the revenue generated and prospects of future referrals etc It’s a business decision.

Any small practice which has staff and premises cannot be viable as a non fee charging concern. The fees often go a long way to cover the overheads and provide liquidity for lean times.







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Jamie Elvin
Director at Strive Mortgages
We typically charge a fee of £299 for our services. Most clients we deal with are more than willing to pay reasonable fees for our service, we implement flexibility on this at our discretion. However, we place a high value on our time and expertise and believe that we are more than worth our fee. Having the right advice can save or make you far more money than the broker fee itself. Additionally, having a pro-active broker with the capacity to handle the workload and act quickly, as opposed to a potentially overworked, busy fee-free broker, can ensure a speedy application process, especially in times of rising interest rates where time is of the essence to secure a good deal. Furthermore, a considerable amount of time can be invested in abortive sales, and in some instances, a transaction may not be commercially viable without some form of initial commitment.
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Mike Staton
Director at Staton Mortgages
I am a big believer in you get what you pay for. We charge a flat fee because we offer a professional service and go above and beyond for our clients. I understand that some businesses are happy to offer a fee-free service and push for other revenue streams, such as life insurance, building insurance, solicitors and other add-ons which may lead to mis-selling. Unfortunately i have dealt with too many clients who have been told by other brokers that they have to have life insurance, in my experience, these have mainly been fees free brokers. I am aware that not all fees free brokers will do this but the model does encourage sales of other products. Our average procuration fee from the lender is £400. This is not enough revenue to keep a business running unless we lowered our service standards and just churned out mortgage after mortgage.
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Samuel Gee
Director at Manning Gee Investments Limited
We believe in serving our clients and sustaining our business profitably for years to come, which is why we charge fees. Our clients recognise the value we bring through our quality advice, and our modest fees reflect the dedication and expertise we offer. Unlike traditional models, we charge at the point of Decision in Principle, where the majority of our advisory work takes place, and a client that is serious about moving forward is happy with this. If a prospect doesn't fully recognise the value we bring through our service, we respect their freedom to explore alternative options which allows us to focus our time and attention on clients who genuinely want to work with us. For those that do, we always demonstrate the value we bring by the savings the client makes over the short to medium term by taking our advice.
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Gary Boakes
Director at Verve Financial
At Verve Financial we have never charged a fee, we felt that our customers should be able to receive good quality mortgage advice without worrying about the cost because of their circumstances. It means that during the meeting we don't need to spend the majority of the time trying to justify our fee, we can be more transparent with what lenders we think they should be going with, and they will know who they are having a credit score with, there are so many pros for the customer and us as a business.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
I charge a flat fee of £495 for doing a mortgage, payable at the point of making the full application to the lender. However, I do often flex this to varying degrees when I feel the work is less than a full mortgage application; such as a further advance, porting case, or product transfer. This feels fair to me and many clients have been more than happy with the fee, given the level of service provided, which is backed up by the feedback given in the VouchedFor reviews clients have left (one of the questions VouchedFor ask is around value for money). Given the seemingly ever-increasing workload being placed on brokers by the regulators (Consumer Duty being the latest, but Vulnerable Customers only just having been brought in before that), charging fees is the only way to ensure you remain profitable and able to deliver the right service to your clients.
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Jamie Lennox
Director at Dimora Mortgages
Mortgages are a highly regulated market and consumers and leaning on professional advice which an adviser is liable for. Countless days can be spent on cases and a high proportion of house purchases fall through so brokers should be charging for their time and efforts.

Each business model is going to be different but at the end of the day, we all need to be profitable. Without charging a fee it could lead to having to deal with more cases per month to earn enough money which may lead to a reduction in service quality with the broker having less available time per client. This isn't to say all fee brokers are the same but there may also be a risk to the consumer of a harder sell on referral services or insurance to make up the difference of not charging a fee.
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Joe Stallard
Director and Advisor at House and Holiday Home Mortgages
When it comes to broker fees, we’re service-led. This means we charge fees to ensure we have the team members in place to help clients and give them a decent amount of time to really focus on each person's situation, and do a thorough job.

It's a positive for us since we find people appreciate this. It means we offer a relationship-driven service and can advocate for each individual related to their unique circumstances.

Whether brokers want to charge fees or not is up to them, it’s just different business models.
Very few people quibble over the fees. If they do, we advise them that there are a number of good fee-free brokers out there they can work with.
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Steven Morris
Advising Director at Advantage Financial Solutions
There isn't a right or wrong when it comes to charging fees, but there is a right/wrong when it comes to how a broker views it. Many, if not all, fee-free brokers think they offer the same service as every other broker but just don't 'rip off clients'. Yet they fail to spot the fact they have to do a much higher volume of business than their fee charging competition, meaning less time/service per client. They also rarely do any complex cases. Phone a fee free broker for an ex pat semi commercial deal and see how they respond... On the flip side, there are plenty of fee charging brokers who just take the extra income without any perks to the client. They don't offer anything in return for the higher fee. They don't specialise, they don't take fewer cases for a higher service level etc. Regardless of what you charge - It's all about good value for money, or 'fair value' as is now outlined in consumer duty.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
We charge fees for our service in the same way any other service provider would, I understand some brokers do not as the lenders do pay brokers a percentage of the mortgage amount however this is very minimal especially for term mortgages. To be able to obtain a liveable wage without charging our clients a fee we would need to have so many applications running simultaneously to the point where we can no longer provide top tier service and spend so much time researching the market for the best rate as we have so many clients to look after. Another concern I have seen with un-honest ‘free brokers’ is that they only go to the lenders that pay them the highest fees so they are not getting the client the best rate as they are instead ensuring they get paid or are adding their fees on the loan amount and not making the clients aware of this.
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Matthew Jackson
Director at Mint FS
There are some pretty staunch views on both sides of the fee or fee-free fence for Mortgage Brokers.

Personally we charge fees because we offer a professional service - we invest in technology and support roles to aid our clients, and we have regulatory and indemnity costs to pay.

Given the amount of work we do even before we submit an application - i cannot think of another professional role (one requiring formal qualifications) that would work for free?

Charging a fee can make it harder to attract clients - as you rely on reputation, feedback and referrals more, however i believe clients will pay a fee for a service which exceeds their expectations.

After all cost is only ever an issue in the absence of value for money.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
There is more than one way skin a cat and the same stands for fees. Peak is very much a no-fee model but that works when most of our clients are relatively vanilla, would likely have direct gone to the high street otherwise and when we use every mortgage as a touch point to discuss protection.

At the same time I've worked with great free charging firms with a model that works for them.

The big benefit to advisors of a broker fee is cashflow. Especially when your pipeline is taking 6 months to go through. My approach wasn't to change our fee model but co-found a conveyancing service that just made the pipeline turn faster and we never looked back.
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Adam Smith
Founder at Alfa Mortgages
We provide valuable advice to our clients, and in recognition of our expertise, we charge fees for our services. Our clients seek us out because they understand the value of our knowledge and experience, much like engaging an accountant or solicitor. We firmly believe that all brokers should adopt a fee-based model for their advice, as it promotes higher professional standards and fosters consistency within the market. Our commitment to this approach allows us to attract discerning clients who appreciate the worth of our services, with many referrals coming through our extensive network of professional connections.