Mortgage Broker Guide UK

Types of Mortgage Brokers

Not all mortgage advisors are created equal. In the UK, the scope of advice you receive depends heavily on the type of broker you choose. The Financial Conduct Authority (FCA) categorizes advisors based on the range of products they can offer.

1. Whole of Market Brokers

These are the gold standard for independent advice. A "Whole of Market" broker can access a vast range of products from across the entire lending spectrum. While the term "whole" implies every single lender, in practice, it usually means a representative range that covers the vast majority of the market (often 90+ lenders). This includes high street banks, building societies, and specialist lenders who only deal with intermediaries. Using a whole of market broker ensures you are not missing out on a cheaper deal simply because your advisor couldn't access it.

2. Multi-Tied Brokers (Panel)

Multi-tied brokers are restricted to a specific "panel" of lenders. This might be a group of 10 or 15 banks and building societies. While they offer more choice than a single bank, they cannot check the entire market. If the best rate for your circumstances sits with a lender outside their panel, they cannot offer it to you. These arrangements are sometimes found in estate agency branches.

3. Tied Brokers

Tied brokers work for, or are tied to, a single lender. If you walk into a branch of Barclays, Santander, or Nationwide, the mortgage advisor there is "tied". They can only recommend their own products. While their products might be competitive, they are unbiased only regarding their own range. They will not tell you if a competitor across the street offers a rate that is 0.5% lower.

Mortgage Broker Fees Explained

One of the most common questions is: "How much does a mortgage broker cost?" The answer varies significantly depending on the business model of the firm. In 2026, the fee structures generally fall into three categories.

Fee-Free Brokers

Many modern brokers, particularly online-first services, are "fee-free" to the customer. They do not charge you a penny for their advice or service. instead, they rely entirely on the procurement fee paid by the lender.

The Procurement Fee: When a mortgage completes, the lender pays the broker a commission. This is typically between 0.35% and 0.40% of the loan amount. For a £300,000 mortgage, the broker might receive around £1,050 from the lender. Fee-free brokers operate on volume, aiming to process many applications efficiently.

Fixed Fee Brokers

Many traditional high-street brokers charge a fixed fee to the client, in addition to receiving the procurement fee from the lender. This client fee typically ranges from £300 to £600, though some specialized firms may charge more. This fee is often payable in stages: a small engagement fee upfront (e.g., £100) and the balance upon a successful mortgage offer.

Why pay a fee? Some borrowers prefer this model as they feel it ensures the broker is working 100% for them, not just chasing the highest commission. Additionally, for complex cases (like adverse credit or complex self-employment income), the workload is higher, justifying a direct fee.

Hourly or Percentage Fees

Less common in the residential market, some brokers charge a percentage of the loan amount (e.g., 1%) or an hourly rate. This is more typical in the commercial or high-net-worth lending sectors and is rarely seen for standard residential mortgages in 2026.

Mortgage Cost Comparison Calculator

Use our tool to compare two different mortgage deals. This is vital when deciding between a lower rate with a high product fee versus a higher rate with no fee.

Online Brokers vs. High Street Brokers

The rise of fintech has transformed the mortgage landscape. Today, borrowers can choose between digital-first "robo-brokers" and traditional face-to-face advice.

Online Brokers (Habito, Trussle, Mojo)

Companies like Habito, Trussle (now part of Better), and Mojo Mortgages have revolutionized the sector. They offer:

• Convenience: Everything is done online, often via chat interfaces or sleek dashboards. You can upload documents at 10 PM on a Sunday.
• Speed: Automated algorithms can search thousands of products in seconds.
• Cost: They are typically fee-free.

However, some users find that for highly complex or unique situations, the automated systems can sometimes struggle compared to a seasoned human expert who knows a specific underwriter at a bank.

High Street & Traditional Brokers (L&C, John Charcol)

L&C (London & Country) is the UK's largest fee-free broker, operating primarily over the phone but with a traditional advisory model. John Charcol is a premium brokerage that often charges fees but specializes in complex, high-value, and bespoke lending.

Traditional brokers often have deep relationships with business development managers (BDMs) at lenders. If your application is borderline—perhaps due to a gap in employment or a property with unique construction—a traditional broker can often "tell the story" to a lender more effectively than an algorithm.

Benefits of Using a Mortgage Broker

Why not just go to your own bank? Here are the core benefits of using an intermediary in 2026:

1. Access to Exclusive Rates

Lenders often release "broker-exclusive" products. These are interest rates or product fee incentives that are not available directly to the public on the lender's website or in-branch. Lenders do this to control service volumes; they know brokers will package the application correctly, saving the bank administrative work, so they reward this with better rates.

2. Market Expertise & CeMAP Qualification

All regulated mortgage advisors in the UK must hold the CeMAP (Certificate in Mortgage Advice and Practice) qualification. They are experts in the market. They know which lenders have changed their affordability calculations this week, which ones are accepting bonus income at 100%, and which ones are currently processing applications in 2 days versus 20 days. This knowledge is invaluable in a fast-moving market.

3. Consumer Protection

Brokers are regulated by the Financial Conduct Authority (FCA). When a broker recommends a mortgage, they are giving "advice". If that advice turns out to be unsuitable for your needs, you have a route of complaint and compensation via the Financial Ombudsman Service. If you choose your own mortgage (Execution Only), you generally waive these protections.

4. Admin and Stress Reduction

A mortgage application involves a significant amount of paperwork. Brokers handle the certification of documents, the filling of lengthy forms, and the chasing of estate agents, solicitors, and lenders. They act as the project manager for your finance.

When You Might NOT Need a Broker

While brokers are beneficial for most, they aren't always necessary. If you are simply looking to do a Product Transfer (switching to a new deal with your existing lender), you can often do this with a few clicks on your lender's online banking app. If your circumstances haven't changed (income is the same, no new debts), going direct is fast and easy.

However, even in this scenario, a broker can quickly check if your existing lender's offer is actually competitive. It costs nothing to ask a fee-free broker to benchmark your renewal offer against the open market.

The First-Time Buyer Process

For those new to the market, the process usually follows this timeline:

1. Initial Chat: You discuss your deposit, income, and outgoings with the broker.
2. Agreement in Principle (AIP): The broker secures a certificate from a lender stating how much they are likely to lend you. You need this to view properties.
3. Property Search: You find a home and have an offer accepted.
4. Full Application: The broker submits your payslips, bank statements, and ID to the lender.
5. Valuation & Underwriting: The lender checks the property value and assesses your risk.
6. Mortgage Offer: The formal contract is issued.

Frequently Asked Questions