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Should mortgage brokers charge clients a percentage of the loan?

ended 11. September 2026

Shazad Ahmed, founder of Elan Property Finance, has questioned whether percentage-based broker fees fairly reflect the work involved in arranging finance.

His argument is that a £500,000 loan is not necessarily ten times as much work as a £50,000 loan. Brokers charging a percentage may, however, consider factors beyond time spent, including complexity, responsibility, value delivered and the risk of working on cases that do not complete.

For Bridging Loan Directory, I’m particularly interested in how this applies to bridging and specialist property finance.

If you are a broker, borrower, property investor or compliance specialist:

  • Do you favour fixed, percentage, tiered or hybrid fees, and why?
  • Should loan size influence the fee if it does not determine the workload?
  • Do minimum fees or caps make percentage charging fairer?
  • Should complexity, urgency or the risk of non-completion affect the charge?
  • When should a broker fee become payable, and what happens if the loan does not complete?
  • How should client fees and lender commission be explained?

Worked examples showing what would be charged on comparable £50,000, £500,000 and £1 million loans would be particularly useful.

Please distinguish your own charging model or experience from your general opinion.

Responses of around 100–200 words by 12 pm on Friday 11 September, please.

5 responses from the Newspage community

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Tony SanchezVerified
Founder at Bridging Loan Directory
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Matt CoulsonVerified
Founder at Heron Financial
We stepped outside this debate entirely: we don't charge our clients a fee at all. As a B Corp, accessibility is a founding principle, and an upfront fee is one more barrier for the people who can least absorb it. So the worked example is a simple one. Whether the loan is £50,000, £500,000 or a million, the client pays us nothing. On the wider question, Shazad is right that workload doesn't track loan size, so a percentage is hard to justify on effort alone, and if you do charge one, a sensible minimum and cap matter. Where a fee, sometimes even a percentage, is genuinely defensible is complex specialist and bridging work, where the risk and responsibility scale with the deal. We're paid by the lender's procuration fee instead, which we disclose in writing, and the recommendation we make is driven by what suits the client rather than what pays us. Consumer Duty demands that transparency, and being fee-free is simply how we've chosen to live it.
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Nouran MoustafaVerified
Practice Principal & IFA at Roxton Wealth
I am completely against percentage-based broker fees as the default.

A £1 million loan is not automatically ten times more work than a £100,000 loan, so I do not think the client should automatically pay ten times more just because the number is bigger.

For me, the cleaner model is a fixed fee, with sensible minimum loan sizes and possibly a separate complexity fee where the case genuinely demands more work. Urgency, unusual security, multiple entities, title issues or a very difficult exit can justify more. Loan size alone does not.

I also think fees should be crystal clear from day one, including any lender commission. Clients should know exactly what they are paying, when it becomes payable and what happens if the case does not complete.

If a broker only wants larger loans because smaller ones are not commercially viable, set a minimum loan size. Do not disguise that economics inside a percentage fee.

Price the work, not the headline loan amount.
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Oliver JordanVerified
Director at Check Financial
As a protection broker, I don't charge clients fees. I am also unaware of any protection brokers that charge separate fees, especially for personal insurances like life cover, income cover.

Relating this to mortgages, why don't protection brokers charge fees?
The honest answer is we earn a lot of commission for arranging someone's cover.
Since mortgages and protection go hand in hand and ultimately, you should be advising on personal covers when arranging a large debt for someone, I feel simply arranging a clients protection could negate any need to charge additional mortgage broker fees.
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Austyn JohnsonVerified
Founder at Mortgages For Actors
It should be a flat fee for everyone, so everyone starts off on the same floor. If the case needs more work due to added complexity or admin, then yes, there should be a surcharge for this. I dont believe charging by loan size is fair. You should charge on application, so the client is committing themselves, and then should the application fail, offer them another go, or 50% of the fee refunded. That way the work you have done is paid for. If you do your research well enough, there should be a very slim chance of failure anyway. Right First Time - Its my mantra. I also dont actually believe that the client should be told about commission as a regulatory point. This is a fee paid to us by the lender for doing the work properly. as long as the research is transparent, then they should trust that you are not choosing on commission only. Usually, all of our clients pay the same basic tier. Footballers to Stage Cleaners - no one is more special than anyone else.