How Do Mortgage Brokers Get Paid In The UK?
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Key Takeaways
UK mortgage brokers get paid through lender commission plus broker fees. The lender commission (or procurement fees) is typically 0.35% to 0.40% of the mortgage amount. The broker fees (if charged) generally start from £495, and they can go up to 1% of the loan amount. The Financial Conduct Authority (FCA) requires every broker to clearly disclose their fees before proceeding with a deal.
How mortgage brokers actually get paid
Many homebuyers in the UK (especially first-time buyers) fail to realise how transparent broker payments are. The FCA makes it compulsory for brokers to explain exactly how they will be paid before recommending a deal.
So, never hesitate to ask these professionals about their revenue source.
Fee Free Mortgage Broker won't charge you a brokerage fee. Your mortgage lender will pay them a commission after completing the mortgage. This way, many independent mortgage brokers earn commission depending on their loan amount.
Professional brokers focus on regulation and transparency. They will disclose a fixed brokerage fee or a separate advice fee if charged.
The two main ways UK mortgage brokers earn money
A UK mortgage broker's income comes either from procurement fees or broker fees.
Procurement fees (paid by lenders)
This is the commission lenders pay to all mortgage brokers after mortgage completion. It is generally 0.35% to 0.40% of the mortgage amount. This commission won't increase your interest or total mortgage cost. These are the fee-free mortgage brokers you should work with if you want to save money.
Different mortgage lenders pay different procurement fees to the brokers:
| Mortgage Size | Typical Procuration Fee |
|---|---|
| £100,000 | £350 |
| £150,000 | £525 |
| £250,000 | £875 |
| £500,000 | £1,750 |
| £1,000,000 | £3,500 |
Broker fees (paid by homebuyers)
Some mortgage broker fees for their services from their clients. Plus they get paid normal commission from the lender. A standard residential mortgage in the UK generally involves a fee of £400 to £500 (revealed upfront). More complex applications (bad credit, unstable income, or contractors) attract higher fees, often going as high as 1 % of the mortgage amount.
Some brokers charge a fixed brokerage fee for their services. Others charge their clients a percentage (0.35% to 1%) of the loan amount.
These mortgage brokers may ask you to pay their charges upfront, on making your application, or upon your deal's completion. Some of them also refund part of their fees if the applications do not make it.
You should receive an official Fee Disclosure Document from a broker beforehand explaining all their charges.
What is a fee-free mortgage broker?
A fee-free mortgage broker charges no brokerage from their clients. They only receive lender commission. You need not pay them separately for their advice or application support (unless mentioned upfront).
This is a win-win situation. Homebuyers save money by not paying broker fees. At the same time, mortgage brokers have the incentive of getting their clients suitable deals, as that is the only way they will get paid. MariannaFS is a Fee Free mortgage broker with hundreds of 5-star reviews.
Who are fee-free mortgage brokers best suited for?
Fee-free mortgage brokers are best suited for:
- Homebuyers with clean credit
- Suitably employed or established self-employed buyers
- Homebuyers with high deposits
- First-time buyers willing to save on their mortgage expenses
Fee-free services do not mean lower quality
It is a common misconception that fee-free services lack the quality that brokers that charge fees offer.
However, the FCA Consumer Duty requires all mortgage advisers and brokers to recommend suitable products, irrespective of how they are paid. They are all subject to the same regulatory standards.
This makes it legally mandatory for fee-free brokers to offer quality services to their clients. Moreover, the incentive of getting paid after cracking often adds to their efficiency.
How much do UK mortgage brokers charge in 2026?
As of mid-2026, the average mortgage in the UK amounts to £260,000. Subsequently, the procuration fee amounts to £910 to £1,170.
Here is a table comparing what different mortgage brokers charge:
| Case Type | Typical Broker Fee | Procuration Fee |
|---|---|---|
| First-time buyer, clean credit | £0-£495 | 0.35%-0.40% |
| Remortgage (like-for-like) | £0-£495 | 0.35%-0.40% |
| Buy-to-let | £495-£995 | 0.35%-0.40% |
| Self-employed / contractor | £495-0.5 % | 0.35%-0.40% |
| Bad credit / adverse | £495-0.5% | 0.35%-0.40% |
| Expat mortgage | £495 -1% of the loan | 0.35%-0.40% |
When should you pay a fee vs. choose fee-free?
Whether you should pay a broker or choose a fee-free mortgage broker in the UK depends on your circumstances and preferences.
When paying a broker fee works
Paying your mortgage broker works if:
- You have a complicated application
- You are struggling to get standard mortgage approvals
- You want a mortgage with bad credit
When a fee-free option works
A fee-free mortgage broker is the best option if:
- You have a straightforward application
- You are a first-time buyer or remortgaging.
- You are paying a minimum 5-10% deposit.
- You have a stable income
- Your credit is clean
Network vs directly authorised brokers
Many mortgage advisers work in mortgage broker networks as Appointed Representatives (ARs). These are big firms of many advisers, sometimes in thousands. They retain some of their procurement fees (20% to 30%) for their compliance, systems, and regulatory support.
Directly authorised (DA) brokers are directly authorised by the FCA. These are smaller firms compared to networks. They usually retain their full commission. Many mortgage networks that submit high business volumes can also qualify for higher procurement fees of 0.40%
Some of the questions to ask a mortgage broker about their payment
Ask these questions to a mortgage broker before working with them:
- Do you charge a fee and is it refundable?
- When do I pay your fees?
- Will you refund your fees if my application fails?
- Can you show me your Fee Disclosure Document?
- Is the chosen lender is it right choice?
- Are you Directly Authorised or part of a network?
- Can I see your regulatory information, like an FCA reference number?
Rest assured that the UK property market has strong regulations and protects all mortgage borrowers. As a homebuyer, all you need to do is make informed decisions and work with the right professionals at every stage.
