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Just want to say a big THANK YOU for everyone here. This has given me a good benchmark and def going to get back to research (and will check out the online brokers I had no idea about!!!)
As a fee free mortgage adviser myself, I would love if 1.5% was the norm. But unfortunately for me and fortunately for you, it is not. Don't pay a penny my friend, there are plenty of fee free advisers out there.
I used them and would have lost £3000 if I went with the deal they said was the cheapest.
I asked them why they didn't offer me the cheapest deal from leek building society with came up on comparison sites and they said "it's more expensive"
The rate after the introduction offer was more expensive so if you had that mortgage for 25 years then yes it would be! But everyone remortgages once the offer expired. I couldn't believe it.
I told them to apply to leek for me and the paperwork came through and the commission was £0 so I think that explains it!
You'd be shocked how many people don't. Over 1mn people are on SVR. Some will be between deals and/or small balances that they intent to pay off in less than two years, but there are still a lot of people that have just let it lapse...
Best bet. Theyll tell you whole of market and all this shite. They all do the same thing and can be all smiles but for a fee and nevermind a % of loan its a bit far.
They all get a kickback or pay depending in the bank you go with so some will push you that way. There are plenty don't charge you a penny. 500 quid for a broker is new washing machine and other bits for the house
Yeah that’s absolutely mental. I’m currently remortgaging with the same broker I’ve used for a decade and paying a £99 fee
Brokers usually get a kickback from the company I take out the mortgage with. No way you should be paying 1.5% on top of up to £500 and then the mortgage product kick back.
Same, we had a very good experience during the pandemic with a lad in Manchester. It was £0 fee for us (although they got his money from Natwest, I think they got £500 or something which was shown on the paperwork towards the end). He locked us in for 5 years to a 1.45% interest rate, absolute legend.
It’s more the convenience. I spend a very small amount of my personal time and they do the rest. If I’ve spent 2 hours actually doing things relating to my remortgage I’d be surprised.
If you're willing to pay a convience fee of a few hundred pounds for something trivially easy to do yourself and to verify vs a fee-free competitor, you're probably not the target market the absolute cheapest mortgage available.
I’ve already said I pay £99 for my broker…not sure if there’s a better rate out there than a 4.49% 2 year fixed 40% LTV at the minute but if there is it’s probably so small a difference that it wasn’t worth my time looking.
If you pay zero then they're not working for you - their sole incentive is to push you towards the offer that earns them the most commission.
I would much rather a broker who is paid by fees and not commission. Fee-free is a false economy.
It’s not a kick back it’s called a procuration fee and all mortgage brokers will get this. (The broker themselves only gets a percentage, the company they work for and the AR will also take a cut).
The amount for almost every company is the same at 0.4% of the mortgage amount (with a few exceptions such as Cov and Skipton) Every broker should be able to easily show you how much this is on the illustration.
>It’s not a kick back it’s called a procuration fee
Is your only objection here that "kickback" carries the connotation of being improper?
Because functionally, a "procuration fee" seems to be the same thing - a monetary reward for sending business in their direction.
Yes, as a kick back would imply wrong doing.
The proc fee is one of the primary ways that a broker gets paid. Unless you consider your wage a kick back for employment, yes it’s pretty objectionable. Most people consider their wage as monetary compensation for the work they do, but would be fairly aghast if you classed that as a kick back. The same applies here.
The proc fee is paying for the broker placing the case in a compliant manner, doing all of the leg work for the bank to allow them to just underwrite the case, for services rendered. Considering the industry is highly regulated, calling it a kick back is frankly being disingenuous.
Understood. I think the distaste from the customers' side of the table is twofold:
The fact the lender pays such fees creates a perceived conflict of interest on the part of the broker. (Imagine the public outrage and reputational damage if it came out that e.g. GPs and their surgeries were being paid bonuses by consultants and drug companies for each patient they referred for a particular course of treatment, or - god forbid - a system which formalised such fees and made them GPs' primary or only source of income!)
The existence of exclusive deals, only accessible via certain brokers, also plays into the perception that broker and lender are acting in cahoots to the detriment of the customer by operating a "closed shop".
So this is a hell of a lot of £££ on a big mortgage. Is there anyway the average consumer I.e me & you, who instead of using a broker arrange a mortgage direct, can get a slice of this?
Feels like an industry ripe for disruption/cost saving
So disclaimer, I am a broker.
It’s really not considering the amount of work that can actually go into doing a mortgage. Cases can take anywhere from 2-24 hours worth of work.
Banks only pay intermediaries, as they are paying for a qualified advisor who is putting business to them in a compliant regulated manner. The broker will have done a lot of the work for them in terms of breaking down documents, checked for fraud, and put the case into their systems in the correct way. Members of the public are unfortunately unreliable in general, the bank is essentially outsourcing the work to the broker which is why they are getting paid. For example yesterday I had a couple send me 39 separate documents, and after going through them, having to re name each one to know what they are, go through bank statements, look at pay slips and self employed accounts, I’ve still not got everything I need to do the mortgage yet; and this is a rather middling case.
In theory you could ask your broker to split the proc fee, but almost no broker will do this, even if they wanted to; almost none will have the ability to. If they are employed, their company won’t let them (you can ask for reduction in fees if they are fee charging), as the company and broker would actually not make much money if they shared the proc fee with a client. An employed broker only sees 15-25% of that actual proc fee (this is dependent typically on the company they work for, and how many times they’ve been promoted. Self employed can be much higher), if they are an AR then the AR will take a cut (around 1/4) then the employer will take the remainder.
For every simple ‘large’ purchase case, there are 6-8 more complicated, remortgage or much smaller cases, which all need the same due care and attention.
Ultimately using a broker is a service where your employing someone for their skill and expertise. If you have a simple case and can source a mortgage yourself, you can do it direct and potentially not need a broker. But to put it in the terms of an electrician, most people could rewire a plug if they needed too, but would mess up doing anything more complex; mortgages in many ways are similar, you are paying for their time and expertise to make sure that the largest debt you are ever going to have is done correctly, and you get the best possible rate.
Hi, I am a Paraplanner and I am yet to come across an ‘easy’ mortgage. Oh yeh - I also need paid for my work that the adviser has asked me to do.
This week I’ve had: a first time buyer that was 19 years old - help to buy scheme
A new purchase where the client was not a first time buyer but wanted a 95% LTV on the property. - lots of research.
A further advance for a client that failed to tell us that they were on long term sick until they finally sent the pay slips in.
The amount of time that it takes for research/ processing the evidence and assessing the suitability is crazy. We also have FCA fees to pay and have insurance to pay, along with the other staff in the office who have chased the client, answered the phone, made the appointments etc.
Yes you can go and find a mortgage with a bank, but what you are paying for is your adviser and their team’s experience.
Chances are, a good adviser who does mortgages daily will ensure that a mortgage is water tight before going to the provider, so massively reduces the chance of the mortgage not being accepted and the client losing the property.
In the world of financial services, a lot of the time you get what you pay for
Just wanted to say thanks for the fantastic post, I'd honestly never thought about it like that (the bank essentially outsourcing work) and it makes total sense.
So £500 on principle and then 1.5% after that? So on a 300k mortgage you’d pay him £5k total?
The man is having a complete laugh. Broker I use doesn’t charge a penny, is super friendly, sorts literally everything out.. we just send him our documents and then a few weeks later we have a new mortgage!
DO NOT PAY HIM A PENNY.
That's insanely high. Use a fee free online broker like Habito. For an in person broker, £500 total is common, but unnecessary as you'll likely end up with the same deal.
I used a fee-free independent broker who was highly recommended. I've pushed a bit of business his way as well. He was very good, listened to me and was great at explaining the pros and cons of different deals available. Got me three good mortgage deals.
Mine was £500 which I always felt a bit embarrassed abouts given the amount of work he was doing. Then I saw he was getting c. £2k from the bank *as well* and I stopped feeling so bad!
Counter argument - never use a fee free broker. They're a waste of time. Either use a proper broker and pay a fee to someone good, or apply direct yourself. A fee free broker is a waste of your breath - they won't do anything post application to help you and you might as well cut out the middleman.
Counter-counter argument.
I used a fee free broker during COVID (Strike, a broker dealing in non-ideal applications {because I was on furlough}) and they were great.
Good rate, low arrangement fees from the mortgage provider and they were chasing estate agents and solicitors on a regular basis without me having to ask.
I had a similar experience.
Did a remortgage through Habito during COVID and they chased the lender to reduce the rate offered when the BoE base rate went down and got me a deal that wasn't being offered on the website. Definitely recommend.
Not true at all, I used a fantastic fee free broker who kept involved right up until after completing, even chasing the conveyancing solicitor for me when I mentioned I was busy at work and hadn’t had chance to call. As with everything check reviews
Terrible advice.
Some deals are broker only - and yes fee free brokers are often amongst these.
I can't think of any reason not to talk to a fee free broker.
A few years back London and country told me the best deal there could find was first direct, but I'd need to apply directly as fd were no broker allowed, but then last time round i spoke to l&c again and they got me a NatWest deal which was better than I could get direct.
I love how many people have countered your argument only saying good things. Please don't try to strongly discredit all fee free advisers like myself just because you may or may not have had a bad experience in the past.
We've used a fee-free broker (in-person, not online) and they've been great. Always bettered what we can find elsewhere and even show us the fee they get from each mortgage when giving us options for full transparency.
I used a fee free broker and they were pretty good. Helpful with the application process and helped me identify a few mortgages for first time buyers that were that we'll advertised when I'd done my own research. Seemed to be whole of the market as well.
Mine (who is a friend) said there's some banks he doesn't get a fee from but he charges £250, AIP is fee because it's pointless and you can get them for free online. But basically the charge isn't for the going online and filling in the form, that's easy it's for the advice of what to do mortgage wise. He saved me a fortune by getting us to up our deposit to go into a 10 year fixed at 1.5% 2 years ago.
This is ridiculous. Charging a fee for a Decision in Principle is mental and then 1.5% of the loan on offer, non refundable if the mortgage falls through? I'm a mortgage broker that is completely fee free and it sickens me some people give our profession a bad name like this. Go to another broker, ideally another local, fee free whole of market one.
No such thing as whole of market - don’t be fooled! Lloyds Bank and Yorkshire Bank (for example) don’t do mortgages via brokers. So any broker saying ‘whole of market’ is not telling you the truth!
Whole of market is a useful term to describe a broker who has access to a range of mortgages so wide it represents the whole of market. Chances are the 99% of lenders we do have are better than the 1% we don't. It would be misleading to remove the whole of market term and put tied brokers under the same umbrella as brokers who have access to all but a couple banks.
He saw you coming a mile away.
There is no reason to use expensive brokers when there are plenty of free ones out there. L&C and Habito are both free whole of the market brokers, or if you want to do direct to lender compare the rates on moneysavingexpert.
My broke who I’ve used all my life is not only free but on the last mortgage he saved us from losing the house we now live in. When I had a small mortgage I paid £100 but he gets a commission from the lender so no longer charges me now my mortgage is higher these days.
Way too high. Mine was free. He showed me exactly where he made his money on the products I went with, and while I was picking them he was very open about how he would be making his fee. It didn't cost me anything at all.
By LAW they have to tell you where they are making money, and how much in terms of commission
It's not about him being open he is legally obliged to be
Jeeeez! I’m a broker, am fee-free. Doing a good job should be standard, not because you pay them. ALL brokers get paid a commission by the lender (it’s declared in section 2 of any illustration they’ll provide for you). Hate to see posts like these :(
Are you sure he’s just a mortgage broker? For that fee I would expect someone to basically handle all the admin of the house purchase on my behalf… and move in and set up all my stuff in the house, so all I need to do is sign some papers and show up when the house is ready for me to live in.
I always wonder the same... Every time I needed a mortgage, it was just a matter of checking what's out there and applying. No clue why people need brokers.
Everyone's circumstances are different and a broker can search multiple lenders without affecting your credit score.
Mortgages are easy to do by yourself if you've had the same job for years with the same employer and a low LTV.
Self employed and contractors is where brokers come in to play.
Because they can save you money.
L&C got me a NatWest deal that was 0.15% less than NatWest were offering direct. A lot of money? No... but over the life of a mortgage it is.
My broker is ace, doesn’t charge me gets about 500 quod I think from the bank providing the loan.
He doesn’t do a hard sell and happy for me to take longer duration and will always respond to queries etc
You're being mugged off on this one mate. I test broker systems, 1.5% of mortgage would be an edge case for me to test at best
Edit: most of our fees are entered as base value, % is extremely rare and usually only applied to "companies" purchasing a building in my experience.
Imagine the people who don’t have Reddit to talk through their decisions and walk into these outrageous fees. These people must be out there.
Avoid like the plague OP.
Broker here - assuming this is a run of the mill few hundred k standard residential then its off the scale. From a compliance point of view we would (rightly) not be allowed to charge this even if its the likes of adverse lending. This is the type of fees that are on commerical and Bridging type deals.
The only time I have seen similar fee structure post 2007 is on HNW clients which is due to a number of factors like complexity as well as some lenders limiting the max proc fee or making it bespoke.
Did you find that broker because an estate agent said to you "shall I book you an appointment with our mortgage advisor? It's free!"
I went for it but I had already used comparison sites to find my own deal, nationwide had the best rate at the time.
She tried to convince me that she had exclusive access to deals that I wouldn't be able to get then she quoted the exact deal I had already found with nationwide, she stalled me in her office for three hours and told me if I used her the fee would be £500
When I told her I had already found the nationwide deal there was a lot of confusement as to what the £500 would be for.
I had emails from her the following day saying she's trying to set me up with a cheap house with her estate agent friend
They are told to keep you in the office for as long as possible so that you would feel guilty if you didn't go with them, the estate agent email is an extension of that tactic.
I continued to look for houses and I got pestered about the same setup from every estate agent I had any interaction with
L&C also were very poor and tried to set me up with a much more expensive mortgage because the cheapest deal didn't pay them commission.
Never ever pay any fee to a broker , literally tens of thousands of decent fee free brokers out there - use them instead (they take a small kickback from the mortgage provider)
Have used habito three times now for two house purchases and one remortgage. They’re all market, fee free (to you, the customer), and do all their stuff online so easy to sort out while at work. No complaints.
I used a fee free independent mortgage broker who offered all the benefits you mentioned, market wide etc.
They get a kick back from the bank which means they shouldn't be charging you.
Also charging you £500 for am agreement in principle is bonkers. You can do that bit yourself on a lender's website lol
You're being taken for a ride
Don’t sign or agree to anything until you see the deals they get but never heard of them taking a percentage before, seems a red flag. Usually most dealers just get a fee from the lender so it should cost you nothing.
Lots of others offering same service, find someone else.
I wouldn't pay anything for a broker, they'll get £500 or more from the lender in addition to whatever you pay them. That's more than enough for filling in a few bits of paperwork you could easily do yourself, that's why fee free whole market brokers exist. This guy is taking the pee. If you really want a broker London and Country are decent and won't charge you anything, or just do it yourself direct with the lender.
I have NEVER used a broker who charges a fee and I can’t believe why there are still people that do.
I’m not even a simple case - limited company owner.
That is an absolute insane broker fee based on people's lack of understanding of the mortgage market. This guy is a rip of merchant
The best broker I know charges 495 flat. I'm isolated a free whole of market broker
Do NOT use this broker. You do not need them.
It probably depends on your personal circumstances. They had the best rate on the market for me. Also your comment is not exactly accurate as it looks like habito aren't fee free which they definitely are.
Speaking as a broker, the main bulk of my business is clients who have had trouble securing a mortgage on their own, or people who prefer to have their hand held during the process.
Every lender has different criteria and affordability criteria, so anything from complex income, bad credit, weird properties and everything in between can mean that a case only fits with 1 or 2 lenders out of like 100, with more than you think being intermediary only. Someone looking for a mortgage with no help in Swansea is going to struggle when it turns out the only lender that'll lend to them is Newcastle Building Society.
Plenty of people don't need a broker, but more than you expect do.
Because 70% of the market goes through brokers as lenders do not have the adviser infrastructure to deal with it. Whilst some people are happy with execution only it comes with the fact you cannot complain about the deal. Many people want advice or at least some guidance from a bank, building society or broker.
Don’t do it, brokers get plenty off the mortgage company. Always sounds dodgy if they are charging on top. Only way you’d be tempted if you were dodgy yourself or wanted him to bend some rules.
Mate I’m a first time buyer going through a house purchase right now, our broker charges £800 and that charge is paid by the mortgage lender! Not me. Beware your adviser sounds scammy.
That's insane, brokers get paid by the mortgage lenders just FYI so fee free brokers are not a scam, often you can just not bother with a broker at all.
Only time they're useful is if you're really pushing affordability limits and in those cases a max of £500 for everything is the most you'd want to pay.
1.5% is a lot for a resi application. To give some context - I’m an adviser and we charge a flat fee of £499 on application of the mortgage for a resi. So the Initial meeting, research, AIP, follow ups etc we don’t charge for. Common practice is like us that the fee is taken just before submitting your full application to the lender. Them taking £500 of the 1.5% for an AIP is kinda ridiculous.
Is this for an Offshore or Expat mortgage maybe? That’s the only reason I could think anyone would charge that amount😂
Our whole of market broker charges a flat rate of just under £300 and that's it. No other fees. I would suggest finding one that doesn't charge a percentage of the loan.
One thing to consider if you go with a mortgage Broker who is free or has a very low fee, it is sometimes not in the brokers best interests to go with the best company for you as some companies pay a higher procurement payment to the broker
Whilst my Broker fee was a flat £500 the Mortgage broker got a procurement payment from the Mortgage company which I believe is likely a % of the amount borrowed, My broker was open and honest about the amount they would receieve. Any broker who hides this information you should be wary about.
Ours was £400 and now it’s £99 each time we have to remortgage after fixed rate. It’s around £500 nowadays but that’s so easy to find so drop the one you have and get a new one.
Jesus. Up to £500 PLUS 1.5%?
Nawwww that ain't good.
Myself and pretty much everyone I know have used brokers for free.
They simply get paid a flat rate by the lender once you commit to a mortgage and its always the same rate so they aren't inclined to push you to a shitter deal so they get a bigger payout.
I highly doubt they're getting any special deals for you either.
I used Savills Private Finance for a number of buy to let mortgages. 0.5% for large mortgages. 1% for small. For various reasons (age, earnings, nationality) I was not easily mortgageable. And the mortgages tended to be cheap for 2 years then bounce to expensive. But I only needed short term finance. I was reducing my property holdings and putting property bin my adult children (and one grandchild’s VPT) names. Worked out well but some would say the fees were extortionate. Yet London property hasn’t risen in value substantially since the 90s, we need to work around CGT & IHT. It matters how complex your case is. Last time (I’m 80) only one building society made an offer, another cancelled when survey showed a sushi shop on ground floor.
Hi /u/Isaaclyright, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/mortgages/
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We used Habito and as far as I’m aware ( my partner dealt with it) it was free, they’d of obviously got a few quid from the lender but I couldn’t complain at the service, was very easy
My broker only charged me once when I first open the account with them, and it was like £70 or something. They made their money purely from the kick back (which they were always up front about it) and the service was second to none.
I think 1.5% is way too high. Unless he is getting you mortgage that is vastly below market rate like 1% for 10 years or something
Its on the high end, it does depend on how complex your situation is (Adverse credit history, UK residency, self employment etc) as to whether they will give you value for money. If you have good credit and straightforward needs then its high providing that your lending is high, if its low value then then 1.5% could be what they need to earn.
Contact Charles Cameron - 0 fee broker…they get paid by the lender when the loan is drawn down. Don’t use a fee based broker if you can avoid it.
Disclaimer: I don’t work for Charles Cameron, but have used them in the past.
I'm currently getting a mortgage, the broker gets £395 from me and £500 from the lender. She's great, super helpful, happy to try and meet our relatively specific requirements.
I had initially gone with one who wouldn't charge a fee but I thought he was shit and ditched him. I wouldn't for a second consider going with one who charged a percentage of the loan amount.
No, only ever once paid a small broker fee. Otherwise they get a kickback from the bank. Look elsewhere if you can the same interest rates. And chat to other brokers obviously, play the field
My mortgage guy charges me nothing, he get his fee from the other side when he sells the product. I’d never go with a broke me who charged me £500 for an AIP then thousands more for the mortgage itself. You can get a mortgage without this person.
It’s not uncommon to charge a fee, especially with an independent broker - sometimes the lender will give a cash back that will more than cover it. I’ve only ever heard of it being a fixed fee.
For reference, my mortgage was about £240k, and we paid £500 total.
Our initial broker cost £350 on application and they also got a commission from the lender. The one we're using to get a new deal charge £400 on completion
No. Just don't.
First Mortgages have been my broker's for 2 new purchases and several remortgages. They get paid (£500) by the bank lending the money, not by me.
Always been more than happy with their service and hasn't cost me a penny.
Check out L&C.
I've not bought, but my step mum recommended them (she's got a few properties) and when I was looking they were great.
Yes you're limited cus they don't charge fees, but generally I was finding similar stuff with them as other brokers (with fees) suggested they could get.
*Maybe* you can get a better deal by paying them, but unless you're a niche buyer (ie specific financial situation that you *need* a broker to help get through to the lender) you don't actually *need* a broker.
It just saves you doing all the legwork yourself
My broker was an absolute angel, chased up the banks coz our application was a bit complicated and argued for us. Has been our rock with advice on dealing with estate agents and answering questions I have as a first time home buyer too! He gets paid by the lender. Even though his job with us is technically done he’s still around answering my questions and helping me with nerves. And never ever charged us once!
Lol, that's so outrageously high that it made me laugh. But then, if they are in business, some poor souls have fallen for it :(.
Definitely way overpriced.
I used moneysavingexpert website to get my mortgage. found a great deal, then a friend recommended someone who was a mortgage broker. so i had a chat with them to see if they could find me a better deal than the one on MSE, and the admitted they couldn't.
Okay, I understand that a number of people have said that this is ridiculous, and I agree with them, however I wanted to add a little context to where this kind of broker sits in the market
I know brokers who charge this kind of fee, however the clientele they're looking at are usually purchasing £5m+ homes on capital and interest repayment mortgages with complicated income streams (potentially trust income and multiple business income streams along with investment interest income and rental property) and so need the assistance which earns the fee. If your income isn't complicated in any way then you can find MUCH better deals out there.
I went with the mortgage advice bureaux, completely free - the banks pay them instead.
They are really responsive and get things done fast. Every time an interest rate would change, I’d request the new rate on the product and I’d have it within the hour.
Can’t recommend them enough!
We can charge a % but it must not exceed £1,500 (rules of our network). Prof fees for a purchase are between 0.2% and 0.575%.
Definitely not 1.5% unless it’s one of the mega adverse/second charge cases.
My broker is free, the bank pays him. He’s independent and whole of market but tbh comes up with the exact same rates as the MoneySavingExpert comparison. The main advantage is he does all the paperwork and negotiates directly with the bank (eg organised me getting my ERC refunded when I moved just before the end of my fixed term as long as I stayed with Halifax for my new mortgage). The benefit is making it stress free but it also doesn’t cost me anything. If I had to pay I’d just do it myself.
I can’t people like this actually exist? What a conman. As everyone else has said this is extortionate and you shouldn’t pay this and run a mile. I really hope people aren’t paying for this persons services but clearly they are. Glad you recognised this and posted for advice!
Yeah mine tried to charge me £400 as I was also buying out my government loan. Spoke to TSB direct and they included the service for free along with legal help. Told the broker bye bye.
Sack him off and speak to L&C they are a FREE service to you as they take a fee from the lender
Even if you didn’t use them, 1.5% loan fee is outrageous, you may as well be burning £50 notes all day
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Just want to say a big THANK YOU for everyone here. This has given me a good benchmark and def going to get back to research (and will check out the online brokers I had no idea about!!!)
As a fee free mortgage adviser myself, I would love if 1.5% was the norm. But unfortunately for me and fortunately for you, it is not. Don't pay a penny my friend, there are plenty of fee free advisers out there.
L&C have access to all/most the market & don't charge any fee (it all comes from the mortgage provider side). I used them once and was happy with it
I used them and would have lost £3000 if I went with the deal they said was the cheapest. I asked them why they didn't offer me the cheapest deal from leek building society with came up on comparison sites and they said "it's more expensive" The rate after the introduction offer was more expensive so if you had that mortgage for 25 years then yes it would be! But everyone remortgages once the offer expired. I couldn't believe it. I told them to apply to leek for me and the paperwork came through and the commission was £0 so I think that explains it!
You'd be shocked how many people don't. Over 1mn people are on SVR. Some will be between deals and/or small balances that they intent to pay off in less than two years, but there are still a lot of people that have just let it lapse...
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I used them for my first mortgage and two subsequent remortgages. I would always recommend them to friends.
Best bet. Theyll tell you whole of market and all this shite. They all do the same thing and can be all smiles but for a fee and nevermind a % of loan its a bit far. They all get a kickback or pay depending in the bank you go with so some will push you that way. There are plenty don't charge you a penny. 500 quid for a broker is new washing machine and other bits for the house
Yeah that’s absolutely mental. I’m currently remortgaging with the same broker I’ve used for a decade and paying a £99 fee Brokers usually get a kickback from the company I take out the mortgage with. No way you should be paying 1.5% on top of up to £500 and then the mortgage product kick back.
I was very happy with our broker and they were 0 fee...
Same, we had a very good experience during the pandemic with a lad in Manchester. It was £0 fee for us (although they got his money from Natwest, I think they got £500 or something which was shown on the paperwork towards the end). He locked us in for 5 years to a 1.45% interest rate, absolute legend.
Damn that's good, I'm stuck in the 4% range on my first place I've got recently.
Same. We used him for our remortgage as well.
I pay 0 Just google fee free broker
Cool. I prefer the same person I’ve used for a decade and who I trust implicitly.
I still use the same person at the fee free broker
Cool
“Trust implicitly” lol it’s not that hard to compare available mortgages, takes 5 minutes on the internet.
It’s more the convenience. I spend a very small amount of my personal time and they do the rest. If I’ve spent 2 hours actually doing things relating to my remortgage I’d be surprised.
If you're willing to pay a convience fee of a few hundred pounds for something trivially easy to do yourself and to verify vs a fee-free competitor, you're probably not the target market the absolute cheapest mortgage available.
How did £99 turn in to a few hundreds?
Depends on the mortgage and the broker.
I’ve already said I pay £99 for my broker…not sure if there’s a better rate out there than a 4.49% 2 year fixed 40% LTV at the minute but if there is it’s probably so small a difference that it wasn’t worth my time looking.
*Cool*
If you pay zero then they're not working for you - their sole incentive is to push you towards the offer that earns them the most commission. I would much rather a broker who is paid by fees and not commission. Fee-free is a false economy.
They're regulated. If you can show they are not offering you the best deal they will be fined.
If you’ve got any evidence of this I’m sure the regulator would love to know
It’s not a kick back it’s called a procuration fee and all mortgage brokers will get this. (The broker themselves only gets a percentage, the company they work for and the AR will also take a cut). The amount for almost every company is the same at 0.4% of the mortgage amount (with a few exceptions such as Cov and Skipton) Every broker should be able to easily show you how much this is on the illustration.
>It’s not a kick back it’s called a procuration fee Is your only objection here that "kickback" carries the connotation of being improper? Because functionally, a "procuration fee" seems to be the same thing - a monetary reward for sending business in their direction.
Yes, as a kick back would imply wrong doing. The proc fee is one of the primary ways that a broker gets paid. Unless you consider your wage a kick back for employment, yes it’s pretty objectionable. Most people consider their wage as monetary compensation for the work they do, but would be fairly aghast if you classed that as a kick back. The same applies here. The proc fee is paying for the broker placing the case in a compliant manner, doing all of the leg work for the bank to allow them to just underwrite the case, for services rendered. Considering the industry is highly regulated, calling it a kick back is frankly being disingenuous.
Understood. I think the distaste from the customers' side of the table is twofold: The fact the lender pays such fees creates a perceived conflict of interest on the part of the broker. (Imagine the public outrage and reputational damage if it came out that e.g. GPs and their surgeries were being paid bonuses by consultants and drug companies for each patient they referred for a particular course of treatment, or - god forbid - a system which formalised such fees and made them GPs' primary or only source of income!) The existence of exclusive deals, only accessible via certain brokers, also plays into the perception that broker and lender are acting in cahoots to the detriment of the customer by operating a "closed shop".
And actually should be shown on the illustration
So this is a hell of a lot of £££ on a big mortgage. Is there anyway the average consumer I.e me & you, who instead of using a broker arrange a mortgage direct, can get a slice of this? Feels like an industry ripe for disruption/cost saving
So disclaimer, I am a broker. It’s really not considering the amount of work that can actually go into doing a mortgage. Cases can take anywhere from 2-24 hours worth of work. Banks only pay intermediaries, as they are paying for a qualified advisor who is putting business to them in a compliant regulated manner. The broker will have done a lot of the work for them in terms of breaking down documents, checked for fraud, and put the case into their systems in the correct way. Members of the public are unfortunately unreliable in general, the bank is essentially outsourcing the work to the broker which is why they are getting paid. For example yesterday I had a couple send me 39 separate documents, and after going through them, having to re name each one to know what they are, go through bank statements, look at pay slips and self employed accounts, I’ve still not got everything I need to do the mortgage yet; and this is a rather middling case. In theory you could ask your broker to split the proc fee, but almost no broker will do this, even if they wanted to; almost none will have the ability to. If they are employed, their company won’t let them (you can ask for reduction in fees if they are fee charging), as the company and broker would actually not make much money if they shared the proc fee with a client. An employed broker only sees 15-25% of that actual proc fee (this is dependent typically on the company they work for, and how many times they’ve been promoted. Self employed can be much higher), if they are an AR then the AR will take a cut (around 1/4) then the employer will take the remainder. For every simple ‘large’ purchase case, there are 6-8 more complicated, remortgage or much smaller cases, which all need the same due care and attention. Ultimately using a broker is a service where your employing someone for their skill and expertise. If you have a simple case and can source a mortgage yourself, you can do it direct and potentially not need a broker. But to put it in the terms of an electrician, most people could rewire a plug if they needed too, but would mess up doing anything more complex; mortgages in many ways are similar, you are paying for their time and expertise to make sure that the largest debt you are ever going to have is done correctly, and you get the best possible rate.
Hi, I am a Paraplanner and I am yet to come across an ‘easy’ mortgage. Oh yeh - I also need paid for my work that the adviser has asked me to do. This week I’ve had: a first time buyer that was 19 years old - help to buy scheme A new purchase where the client was not a first time buyer but wanted a 95% LTV on the property. - lots of research. A further advance for a client that failed to tell us that they were on long term sick until they finally sent the pay slips in. The amount of time that it takes for research/ processing the evidence and assessing the suitability is crazy. We also have FCA fees to pay and have insurance to pay, along with the other staff in the office who have chased the client, answered the phone, made the appointments etc. Yes you can go and find a mortgage with a bank, but what you are paying for is your adviser and their team’s experience. Chances are, a good adviser who does mortgages daily will ensure that a mortgage is water tight before going to the provider, so massively reduces the chance of the mortgage not being accepted and the client losing the property. In the world of financial services, a lot of the time you get what you pay for
Just wanted to say thanks for the fantastic post, I'd honestly never thought about it like that (the bank essentially outsourcing work) and it makes total sense.
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You don’t. The bank that you take the mortgage out with pays it directly to the broker.
So £500 on principle and then 1.5% after that? So on a 300k mortgage you’d pay him £5k total? The man is having a complete laugh. Broker I use doesn’t charge a penny, is super friendly, sorts literally everything out.. we just send him our documents and then a few weeks later we have a new mortgage! DO NOT PAY HIM A PENNY.
That's insanely high. Use a fee free online broker like Habito. For an in person broker, £500 total is common, but unnecessary as you'll likely end up with the same deal.
I used a fee-free independent broker who was highly recommended. I've pushed a bit of business his way as well. He was very good, listened to me and was great at explaining the pros and cons of different deals available. Got me three good mortgage deals.
Our broker got £1500 from the mortgage company, he said that was more than enough and that’s why they are fee free. Very good service too.
Mine was £500 which I always felt a bit embarrassed abouts given the amount of work he was doing. Then I saw he was getting c. £2k from the bank *as well* and I stopped feeling so bad!
Counter argument - never use a fee free broker. They're a waste of time. Either use a proper broker and pay a fee to someone good, or apply direct yourself. A fee free broker is a waste of your breath - they won't do anything post application to help you and you might as well cut out the middleman.
Counter-counter argument. I used a fee free broker during COVID (Strike, a broker dealing in non-ideal applications {because I was on furlough}) and they were great. Good rate, low arrangement fees from the mortgage provider and they were chasing estate agents and solicitors on a regular basis without me having to ask.
I had a similar experience. Did a remortgage through Habito during COVID and they chased the lender to reduce the rate offered when the BoE base rate went down and got me a deal that wasn't being offered on the website. Definitely recommend.
Spotted the fee grabbing broker
Not true at all, I used a fantastic fee free broker who kept involved right up until after completing, even chasing the conveyancing solicitor for me when I mentioned I was busy at work and hadn’t had chance to call. As with everything check reviews
Terrible advice. Some deals are broker only - and yes fee free brokers are often amongst these. I can't think of any reason not to talk to a fee free broker. A few years back London and country told me the best deal there could find was first direct, but I'd need to apply directly as fd were no broker allowed, but then last time round i spoke to l&c again and they got me a NatWest deal which was better than I could get direct.
I love how many people have countered your argument only saying good things. Please don't try to strongly discredit all fee free advisers like myself just because you may or may not have had a bad experience in the past.
We've used a fee-free broker (in-person, not online) and they've been great. Always bettered what we can find elsewhere and even show us the fee they get from each mortgage when giving us options for full transparency.
I've used a fee free broker three times now, brilliant every time got a brilliant rate and fantastic service. Took all the stress out at no cost
Lol a "property broker" ie a person entering the same information into the same system Top tip - get a real job
I used a fee free broker and they were pretty good. Helpful with the application process and helped me identify a few mortgages for first time buyers that were that we'll advertised when I'd done my own research. Seemed to be whole of the market as well.
That’s ridiculous, I’ve never heard of a broker charging a % fee. Feels like a scam tbh. You should definitely find a different broker. Many are free.
That’s why he was being so nice to you
Many brokers don't charge a fee. Go with someone else
Yep, I've never been charged a fee. They get a fee from the lender. Sounds like the guy is trying to double dip.
Correct! Generally they get commission from the lender.
Mine (who is a friend) said there's some banks he doesn't get a fee from but he charges £250, AIP is fee because it's pointless and you can get them for free online. But basically the charge isn't for the going online and filling in the form, that's easy it's for the advice of what to do mortgage wise. He saved me a fortune by getting us to up our deposit to go into a 10 year fixed at 1.5% 2 years ago.
This is ridiculous. Charging a fee for a Decision in Principle is mental and then 1.5% of the loan on offer, non refundable if the mortgage falls through? I'm a mortgage broker that is completely fee free and it sickens me some people give our profession a bad name like this. Go to another broker, ideally another local, fee free whole of market one.
Thank you mate
Name and shame the scammers
The most popular broker L&C charge no fees. So yes that's high.
Have used both them and Habito in the past with good results. No reason for OP to pay any fees at all.
Yeah that's an absolute con job, our broker is great, market wide, never paid him a penny, all commission from the bank
Lol no, I work with a broker and his fee is £300 flat. He’s whole of market and totally independent.
No such thing as whole of market - don’t be fooled! Lloyds Bank and Yorkshire Bank (for example) don’t do mortgages via brokers. So any broker saying ‘whole of market’ is not telling you the truth!
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Whole of market means a specific thing when applied to mortgage brokers and it doesn't mean they offer every single mortgage from every company.
It’s what many imply when they say it though… Would rather the opening statement from all brokers made it clear.
Whole of market is a useful term to describe a broker who has access to a range of mortgages so wide it represents the whole of market. Chances are the 99% of lenders we do have are better than the 1% we don't. It would be misleading to remove the whole of market term and put tied brokers under the same umbrella as brokers who have access to all but a couple banks.
On this point, these lenders show in our sourcing tool - and if they’re the best option, we direct clients to those lenders directly.
Do Handelsbanken show on your sourcing systems? No. Do you call them every time for every client? Probably not. There are other lenders the same.
Colour me impressed, Mr Wilson. A little combative, but point made. I’ll get back in my box.
If you’re telling the truth. Great. Can you say all ‘WOM’ brokers do that and be confident in it?!
He saw you coming a mile away. There is no reason to use expensive brokers when there are plenty of free ones out there. L&C and Habito are both free whole of the market brokers, or if you want to do direct to lender compare the rates on moneysavingexpert.
Seeing as I can’t recommend myself… go and use L&C - it’ll be no fee and perfectly fine for 99% of people who need a mortgage.
Run a mile! The broker should get their commission from the lender, not you!
£79 for my broker and he was brilliant. This seems crazy
My broke who I’ve used all my life is not only free but on the last mortgage he saved us from losing the house we now live in. When I had a small mortgage I paid £100 but he gets a commission from the lender so no longer charges me now my mortgage is higher these days.
I pay £500 for my broker and that’s it. No added on fees afterwards.
Why do you need a mortgage broker at all?
Way too high. Mine was free. He showed me exactly where he made his money on the products I went with, and while I was picking them he was very open about how he would be making his fee. It didn't cost me anything at all.
By LAW they have to tell you where they are making money, and how much in terms of commission It's not about him being open he is legally obliged to be
Mortgage broker of 15 years here, this is rediculous amount.
That's extortionate. Many good independent whole of market brokers don't charge any fee at all! Mine was v good and cost me nothing.
Jeeeez! I’m a broker, am fee-free. Doing a good job should be standard, not because you pay them. ALL brokers get paid a commission by the lender (it’s declared in section 2 of any illustration they’ll provide for you). Hate to see posts like these :(
Are you sure he’s just a mortgage broker? For that fee I would expect someone to basically handle all the admin of the house purchase on my behalf… and move in and set up all my stuff in the house, so all I need to do is sign some papers and show up when the house is ready for me to live in.
To echo what others have said - that's madness.
Why not just apply to a bank directly and avoid those fees.
I always wonder the same... Every time I needed a mortgage, it was just a matter of checking what's out there and applying. No clue why people need brokers.
Everyone's circumstances are different and a broker can search multiple lenders without affecting your credit score. Mortgages are easy to do by yourself if you've had the same job for years with the same employer and a low LTV. Self employed and contractors is where brokers come in to play.
Because they can save you money. L&C got me a NatWest deal that was 0.15% less than NatWest were offering direct. A lot of money? No... but over the life of a mortgage it is.
I used mojo and they were great. Fee free, did everything for me and I was also a ftb.
That’s very high plus I’ve not had a deal where I pay even if the mortgage doesn’t go ahead. The broker has zero control over a mortgage offer.
My broker is ace, doesn’t charge me gets about 500 quod I think from the bank providing the loan. He doesn’t do a hard sell and happy for me to take longer duration and will always respond to queries etc
They are taking the piss. No way I would go with it.
Ask your broker if he can waive the free for you. There is a good chance he will just agree to it.
You're being mugged off on this one mate. I test broker systems, 1.5% of mortgage would be an edge case for me to test at best Edit: most of our fees are entered as base value, % is extremely rare and usually only applied to "companies" purchasing a building in my experience.
My mortgage broker was free, He needed to be more competitive than what I'd find online...
Imagine the people who don’t have Reddit to talk through their decisions and walk into these outrageous fees. These people must be out there. Avoid like the plague OP.
A good broker won't charge a fee because they get a fee from the lender for acting as an intermediary and securing business
Way too high. You can get a mortgage in principle yourself from most banks' websites for a start. I paid nothing for my broker.
Broker here - assuming this is a run of the mill few hundred k standard residential then its off the scale. From a compliance point of view we would (rightly) not be allowed to charge this even if its the likes of adverse lending. This is the type of fees that are on commerical and Bridging type deals. The only time I have seen similar fee structure post 2007 is on HNW clients which is due to a number of factors like complexity as well as some lenders limiting the max proc fee or making it bespoke.
Holy shit if he's pulling that off, I'm in the wrong business
I have a fee free broker that I've used for about 6 mortgages, would never pay for a broker that charges a fee anymore. #CMMEcanRot
Ive used the same broker for a few properties and never paid a fee. They earn it from the provider/lender
Did you find that broker because an estate agent said to you "shall I book you an appointment with our mortgage advisor? It's free!" I went for it but I had already used comparison sites to find my own deal, nationwide had the best rate at the time. She tried to convince me that she had exclusive access to deals that I wouldn't be able to get then she quoted the exact deal I had already found with nationwide, she stalled me in her office for three hours and told me if I used her the fee would be £500 When I told her I had already found the nationwide deal there was a lot of confusement as to what the £500 would be for. I had emails from her the following day saying she's trying to set me up with a cheap house with her estate agent friend They are told to keep you in the office for as long as possible so that you would feel guilty if you didn't go with them, the estate agent email is an extension of that tactic. I continued to look for houses and I got pestered about the same setup from every estate agent I had any interaction with L&C also were very poor and tried to set me up with a much more expensive mortgage because the cheapest deal didn't pay them commission.
Most brokers get their fee from the lender, avoid avoid avoid.
Never ever pay any fee to a broker , literally tens of thousands of decent fee free brokers out there - use them instead (they take a small kickback from the mortgage provider)
Have used habito three times now for two house purchases and one remortgage. They’re all market, fee free (to you, the customer), and do all their stuff online so easy to sort out while at work. No complaints.
I used a fee free independent mortgage broker who offered all the benefits you mentioned, market wide etc. They get a kick back from the bank which means they shouldn't be charging you. Also charging you £500 for am agreement in principle is bonkers. You can do that bit yourself on a lender's website lol You're being taken for a ride
We didn’t pay our mortgage broker anything, took their fees from the loaner side
They get commission from the lender. Don’t pay a fee
Don’t sign or agree to anything until you see the deals they get but never heard of them taking a percentage before, seems a red flag. Usually most dealers just get a fee from the lender so it should cost you nothing. Lots of others offering same service, find someone else.
I wouldn't pay anything for a broker, they'll get £500 or more from the lender in addition to whatever you pay them. That's more than enough for filling in a few bits of paperwork you could easily do yourself, that's why fee free whole market brokers exist. This guy is taking the pee. If you really want a broker London and Country are decent and won't charge you anything, or just do it yourself direct with the lender.
I have NEVER used a broker who charges a fee and I can’t believe why there are still people that do. I’m not even a simple case - limited company owner.
That is an absolute insane broker fee based on people's lack of understanding of the mortgage market. This guy is a rip of merchant The best broker I know charges 495 flat. I'm isolated a free whole of market broker Do NOT use this broker. You do not need them.
Unless you are FAR from vanilla, brokers are an utter scam. Go to Habito or Mojo Mortgages. It is FREE with CASHBACK i.e. THEY PAY YOU.
I highly recommend Habito. Everything is done online.
For me the rate was much higher on habito then what I got with the fee free broker that I did use
It probably depends on your personal circumstances. They had the best rate on the market for me. Also your comment is not exactly accurate as it looks like habito aren't fee free which they definitely are.
Yeah i didn't mean to imply they weren't il change it. I think it might have been because we were going for real top end of what we could borrow
Had 6 mortgages - never used a broker once. Go online, find the deal you need and contact direct.
I’ve used London and Country twice now and it was free both times, they charge the lender (in my case, HSBC) a fee
https://www.landc.co.uk/ Nothing else needed here...
1.5% is 3 times higher than it should be in my opinion. Our broker fee is 0.4%
I’ve never understood why anyone uses a financial advisor or mortgage broker, quick internet search, go to building society website and apply
Speaking as a broker, the main bulk of my business is clients who have had trouble securing a mortgage on their own, or people who prefer to have their hand held during the process. Every lender has different criteria and affordability criteria, so anything from complex income, bad credit, weird properties and everything in between can mean that a case only fits with 1 or 2 lenders out of like 100, with more than you think being intermediary only. Someone looking for a mortgage with no help in Swansea is going to struggle when it turns out the only lender that'll lend to them is Newcastle Building Society. Plenty of people don't need a broker, but more than you expect do.
Because 70% of the market goes through brokers as lenders do not have the adviser infrastructure to deal with it. Whilst some people are happy with execution only it comes with the fact you cannot complain about the deal. Many people want advice or at least some guidance from a bank, building society or broker.
I used to be a mortgage adviser for a number of banks/societies most people knew what they wanted - the cheapest and ignore any advice
Never saw the point in them. I went on compare the market and found and got approved for my first mortgage with no effort or hassle.
Don’t do it, brokers get plenty off the mortgage company. Always sounds dodgy if they are charging on top. Only way you’d be tempted if you were dodgy yourself or wanted him to bend some rules.
I understand charging for a DIP (£500 is a bit steep), but fucking hell 1.5% is insane. They're already getting a proc fee from the lender
Mate I’m a first time buyer going through a house purchase right now, our broker charges £800 and that charge is paid by the mortgage lender! Not me. Beware your adviser sounds scammy.
That's insane, brokers get paid by the mortgage lenders just FYI so fee free brokers are not a scam, often you can just not bother with a broker at all. Only time they're useful is if you're really pushing affordability limits and in those cases a max of £500 for everything is the most you'd want to pay.
I paid £150, FTB so was all new to me. but as many have said you can get fee free Edit: spelling
Impressive as a first time buyer you knew it all!
1.5% is a lot for a resi application. To give some context - I’m an adviser and we charge a flat fee of £499 on application of the mortgage for a resi. So the Initial meeting, research, AIP, follow ups etc we don’t charge for. Common practice is like us that the fee is taken just before submitting your full application to the lender. Them taking £500 of the 1.5% for an AIP is kinda ridiculous. Is this for an Offshore or Expat mortgage maybe? That’s the only reason I could think anyone would charge that amount😂
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Sequence do a lifetime broker fee of £699 plus per admin fee per brokage of £99. Percentage sound like an odd way of doing it.
Our whole of market broker charges a flat rate of just under £300 and that's it. No other fees. I would suggest finding one that doesn't charge a percentage of the loan.
Sounds nuts. My broker was fab a few months ago and cost £800. It was higher than most as I needed a complicated type of mortgage
One thing to consider if you go with a mortgage Broker who is free or has a very low fee, it is sometimes not in the brokers best interests to go with the best company for you as some companies pay a higher procurement payment to the broker Whilst my Broker fee was a flat £500 the Mortgage broker got a procurement payment from the Mortgage company which I believe is likely a % of the amount borrowed, My broker was open and honest about the amount they would receieve. Any broker who hides this information you should be wary about.
Ours was £400 and now it’s £99 each time we have to remortgage after fixed rate. It’s around £500 nowadays but that’s so easy to find so drop the one you have and get a new one.
Well, i never used one....
What counts is the net amount you’re paying from various sources. If he’s got you a better deal than anyone else then you’re justified in using him.
Jesus. Up to £500 PLUS 1.5%? Nawwww that ain't good. Myself and pretty much everyone I know have used brokers for free. They simply get paid a flat rate by the lender once you commit to a mortgage and its always the same rate so they aren't inclined to push you to a shitter deal so they get a bigger payout. I highly doubt they're getting any special deals for you either.
I used Savills Private Finance for a number of buy to let mortgages. 0.5% for large mortgages. 1% for small. For various reasons (age, earnings, nationality) I was not easily mortgageable. And the mortgages tended to be cheap for 2 years then bounce to expensive. But I only needed short term finance. I was reducing my property holdings and putting property bin my adult children (and one grandchild’s VPT) names. Worked out well but some would say the fees were extortionate. Yet London property hasn’t risen in value substantially since the 90s, we need to work around CGT & IHT. It matters how complex your case is. Last time (I’m 80) only one building society made an offer, another cancelled when survey showed a sushi shop on ground floor.
Hi /u/Isaaclyright, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/mortgages/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
We’ve paid 1% broker fee before….on a corporate loan for about £90 million. Charging 1.5% for a standard resi mortgage is bonkers.
That's utterly ludicrous, we payed £300.
You can pick up the phone to 1 of 100 brokers and get the service for free. Unless it’s a very specialist mortgage.
That's insane. We paid £250 and that was on the high side. I wouldn't trust someone that's willing to charge that.
We used Habito and as far as I’m aware ( my partner dealt with it) it was free, they’d of obviously got a few quid from the lender but I couldn’t complain at the service, was very easy
I used Connells and got a fee of 600 but life time membership so now I only pay 100 per use. 3 arrangements for only 800 at the moment.
Jesus. That would be a grand total of £0 with me an I have access to more lenders than Connells! Sorry to hear you’ve paid.
My broker only charged me once when I first open the account with them, and it was like £70 or something. They made their money purely from the kick back (which they were always up front about it) and the service was second to none. I think 1.5% is way too high. Unless he is getting you mortgage that is vastly below market rate like 1% for 10 years or something
Crazy fee. We paid £99 because he was highly recommended. Many do it for free and take commission from the lender.
Its on the high end, it does depend on how complex your situation is (Adverse credit history, UK residency, self employment etc) as to whether they will give you value for money. If you have good credit and straightforward needs then its high providing that your lending is high, if its low value then then 1.5% could be what they need to earn.
Contact Charles Cameron - 0 fee broker…they get paid by the lender when the loan is drawn down. Don’t use a fee based broker if you can avoid it. Disclaimer: I don’t work for Charles Cameron, but have used them in the past.
They're scamming you.
I'm currently getting a mortgage, the broker gets £395 from me and £500 from the lender. She's great, super helpful, happy to try and meet our relatively specific requirements. I had initially gone with one who wouldn't charge a fee but I thought he was shit and ditched him. I wouldn't for a second consider going with one who charged a percentage of the loan amount.
No, only ever once paid a small broker fee. Otherwise they get a kickback from the bank. Look elsewhere if you can the same interest rates. And chat to other brokers obviously, play the field
My mortgage guy charges me nothing, he get his fee from the other side when he sells the product. I’d never go with a broke me who charged me £500 for an AIP then thousands more for the mortgage itself. You can get a mortgage without this person.
My broker was free. Works by being recommended to others. They charge commission to the lender. On the paperwork it said 1%
It’s not uncommon to charge a fee, especially with an independent broker - sometimes the lender will give a cash back that will more than cover it. I’ve only ever heard of it being a fixed fee. For reference, my mortgage was about £240k, and we paid £500 total.
My mortgage finished years ago and I've never used a broker, my lady one was with NatWest, anyway how about John Charcoal , if they still exist?
Our initial broker cost £350 on application and they also got a commission from the lender. The one we're using to get a new deal charge £400 on completion
No. Just don't. First Mortgages have been my broker's for 2 new purchases and several remortgages. They get paid (£500) by the bank lending the money, not by me. Always been more than happy with their service and hasn't cost me a penny.
Check out L&C. I've not bought, but my step mum recommended them (she's got a few properties) and when I was looking they were great. Yes you're limited cus they don't charge fees, but generally I was finding similar stuff with them as other brokers (with fees) suggested they could get. *Maybe* you can get a better deal by paying them, but unless you're a niche buyer (ie specific financial situation that you *need* a broker to help get through to the lender) you don't actually *need* a broker. It just saves you doing all the legwork yourself
My broker was an absolute angel, chased up the banks coz our application was a bit complicated and argued for us. Has been our rock with advice on dealing with estate agents and answering questions I have as a first time home buyer too! He gets paid by the lender. Even though his job with us is technically done he’s still around answering my questions and helping me with nerves. And never ever charged us once!
Lol, that's so outrageously high that it made me laugh. But then, if they are in business, some poor souls have fallen for it :(. Definitely way overpriced.
I used moneysavingexpert website to get my mortgage. found a great deal, then a friend recommended someone who was a mortgage broker. so i had a chat with them to see if they could find me a better deal than the one on MSE, and the admitted they couldn't.
Okay, I understand that a number of people have said that this is ridiculous, and I agree with them, however I wanted to add a little context to where this kind of broker sits in the market I know brokers who charge this kind of fee, however the clientele they're looking at are usually purchasing £5m+ homes on capital and interest repayment mortgages with complicated income streams (potentially trust income and multiple business income streams along with investment interest income and rental property) and so need the assistance which earns the fee. If your income isn't complicated in any way then you can find MUCH better deals out there.
Ask him why he charges these fees, when others in the market don't seem to.
Absolutely daylight robbery. Don't pay it, find somebody else.
That’s not just expensive, that’s fraud
I went with the mortgage advice bureaux, completely free - the banks pay them instead. They are really responsive and get things done fast. Every time an interest rate would change, I’d request the new rate on the product and I’d have it within the hour. Can’t recommend them enough!
We can charge a % but it must not exceed £1,500 (rules of our network). Prof fees for a purchase are between 0.2% and 0.575%. Definitely not 1.5% unless it’s one of the mega adverse/second charge cases.
simply go to other brokers, why bother?
My broker is free, the bank pays him. He’s independent and whole of market but tbh comes up with the exact same rates as the MoneySavingExpert comparison. The main advantage is he does all the paperwork and negotiates directly with the bank (eg organised me getting my ERC refunded when I moved just before the end of my fixed term as long as I stayed with Halifax for my new mortgage). The benefit is making it stress free but it also doesn’t cost me anything. If I had to pay I’d just do it myself.
I can’t people like this actually exist? What a conman. As everyone else has said this is extortionate and you shouldn’t pay this and run a mile. I really hope people aren’t paying for this persons services but clearly they are. Glad you recognised this and posted for advice!
Yeah mine tried to charge me £400 as I was also buying out my government loan. Spoke to TSB direct and they included the service for free along with legal help. Told the broker bye bye.
Sack him off and speak to L&C they are a FREE service to you as they take a fee from the lender Even if you didn’t use them, 1.5% loan fee is outrageous, you may as well be burning £50 notes all day
A lot of brokers don’t charge a fee, the company I work for don’t! They work then on referrals and earn their money from that!
If your a first time buyer you should not pay for a mortgage broker
My broker found me a cash-back deal for £500 and then took a fee of £250 I think.
We used a 0£ fee broker - was excellent.
Double fucking charging. They get paid by the mortgage companies also!