What a mortgage broker does
A mortgage broker (also called a mortgage adviser) is authorised and regulated by the Financial Conduct Authority (FCA) to give personalised advice on mortgage products. They will assess your income, outgoings, credit history and property to determine what you can borrow and which lenders are likely to accept your application. They then research available deals, explain the options and make a recommendation they consider most suitable for you.
Once you agree to proceed, the broker prepares and submits your application, liaises with the lender's underwriters, chases progress and helps manage any queries until a formal mortgage offer is issued. For complex cases this coordination can save a significant amount of time and stress. For straightforward cases it can still be worthwhile simply to ensure no stone is left unturned on the rate comparison.
Crucially, because a broker gives regulated advice, their recommendation must be suitable for you and they must document their reasoning. If a recommended mortgage later proves to have been unsuitable, you have recourse to complain to the broker and ultimately to the Financial Ombudsman Service. Going direct to a lender's own staff typically means information or 'execution-only' service rather than regulated advice, which offers less protection.
Mortgage broker vs going direct: a full comparison
| Factor | Mortgage broker | Going direct to a lender |
|---|---|---|
| Choice of lenders | Many (whole-of-market brokers cover 90+ lenders) | One lender only |
| Type of advice | Regulated, personalised recommendation | Usually information-only or execution-only |
| Access to exclusive deals | Yes, broker-only and lender-exclusive products | Lender's own range only |
| Complex cases (self-employed, adverse credit) | Well suited, brokers know which lenders accept which profiles | Hit and miss, one rejection does not tell you the full picture |
| Credit footprint risk | Broker does a soft search before recommending; one application | Each direct application may leave a hard search on your credit file |
| Cost | Possible broker fee (£0 to £1,500+) plus lender pays commission | No broker fee (but no rate comparison either) |
| Effort required from you | Low, broker handles the legwork | Higher, you must compare and apply yourself |
| FCA protection | Full regulated advice protection | Limited (information service) |
| Speed of application | Experienced brokers can be fast | Straightforward cases can complete online quickly |
Whole-of-market brokers typically have access to over 90 lenders and thousands of products. A tied adviser at your bank only offers that bank's range.
Whole-of-market vs tied vs multi-tied brokers
Not all brokers are equal in the range they cover. A whole-of-market broker can recommend mortgages from across the entire market, including specialist lenders that do not deal directly with the public. This gives you the broadest possible comparison and the best chance of finding a competitive or suitable product.
A tied adviser works for a single lender (for example, your bank's in-branch mortgage adviser) and can only offer that lender's products. A multi-tied broker searches a panel of selected lenders rather than the whole market. When choosing a broker, always ask upfront whether they are whole-of-market or work from a limited panel, as this fundamentally affects the quality of the recommendation.
Even whole-of-market brokers may exclude a small number of lenders by choice. A few lenders (most notably HSBC, First Direct and some building societies) deal exclusively with customers who apply directly. A good broker will tell you this and advise you to check those lenders' own published rates as part of your comparison.
When using a broker is clearly worth it
- You are self-employed, a contractor, a freelancer or have multiple income streams that need careful presentation to a lender.
- You have a low deposit, a high debt-to-income ratio, recent credit issues, or you have been declined by a lender directly.
- You are buying an unusual property such as a listed building, non-standard construction, flat above a commercial premises or a property of restricted height.
- You are a first-time buyer who wants expert guidance through the process and someone to explain the options.
- You want someone to compare the whole market, handle the paperwork and chase the application so you can focus on the move.
- You are remortgaging and want to check whether switching lenders would save more than staying with your current provider.
When going direct can work well
- Your finances are straightforward: employed on PAYE, strong credit history, standard property, deposit of 20% or more.
- You have researched the market thoroughly and your existing lender or a direct lender offers a genuinely market-leading rate.
- You are doing a product transfer with your current lender at remortgage and the rate is competitive with the wider market.
- You are comfortable comparing mortgage products and managing the application process yourself.
- You are applying to a lender that does not accept broker applications, such as HSBC or First Direct.
How mortgage brokers are paid
Brokers earn money in two main ways: a fee charged to you, and a procuration fee (commission) paid by the lender when your mortgage completes. Some brokers charge both; others charge you nothing and rely entirely on the lender's commission. A typical lender procuration fee is around 0.3% to 0.4% of the loan amount, so on a £200,000 mortgage that is £600 to £800.
Broker fees charged directly to you vary considerably. Some fee-free brokers exist, others charge a flat fee of £300 to £500, and some charge a percentage of the loan, commonly 0.3% to 1%, with a cap. A broker charging £995 on a £250,000 mortgage is charging 0.4%. Always ask for a clear breakdown before agreeing to proceed.
It is important to understand that paying a broker fee does not mean you are getting a worse deal. A broker who finds you a rate 0.2 percentage points lower than you could find yourself saves you £400 per year on a £200,000 mortgage, more than most broker fees within a couple of years. Compare the total cost over the deal period, not just whether a fee is charged.
Typical UK mortgage broker fees (2026)
| Broker type | Typical fee to you | How they also earn |
|---|---|---|
| Fee-free whole-of-market broker (e.g. L&C, Habito) | £0 | Lender procuration fee (~0.3%) |
| Independent local broker (flat fee) | £300 to £700 | Often also earns procuration fee |
| Independent broker (percentage of loan) | 0.3% to 1% of loan (capped) | May or may not earn procuration fee |
| Bank's own mortgage adviser (tied) | £0 | Employed by lender, no procuration fee |
| Specialist broker (complex cases) | £500 to £1,500+ | Lender procuration fee |
Always ask brokers to confirm their fee structure in writing before you give them any authority to submit an application.
Ask these four questions before choosing a broker
1. Are you whole-of-market or do you work from a panel? 2. What is your fee and how else are you paid? 3. How many lenders do you have access to? 4. Do you recommend any lenders that deal direct-only, such as HSBC, and should I check them myself? Clear answers to these four questions will tell you a great deal about the quality and independence of the advice you will receive.