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A mortgage broker is an individual who has trained and become qualified to advise and deal with mortgage products. A mortgage brokers qualification must be recognised by the Financial Conduct Authority (FCA) and they should show you a copy of their certificatin when asked.

What do Mortgage Brokers Do?

A mortgage broker is duty bound to help you find the right mortgage and complete the application process when buying a property, a mortgage brokers duties can be broken down as follows:

  1. Home Buying Process: Mortgage brokers are their for you. They will talk you through the home buying process in clear terms you can understand, explaining what will happen, current situation and regular updates once the process begins.
  2. Financial Assessment: A mortgage broker will complete a full financial assessment based on your holistic earnings and expenditure. They do this to ensure that they can advise exactly how much you can afford to borrow and help you understand how your finances can change when interest rates fluctuate.
  3. Mortgage Product Communication and Education: The mortgage broker will explain what the different types of mortgage product are and how they each work. They will also explain what is popular, why and advise on what type of mortgage they feel best suits you and your financial situation.
  4. Provide a range of relevant mortgage products: A mortgage broker must provide you a choice of mortgage products, the range of which will depend on the type of mortgage broker they are, see 'Are all mortgage brokers the same?' below for more details.
  5. Advise on related products (qualification dependant): a mortgage broker can advise on other related financial products which are related to the mortgage. The range of products depends on their qualifications, always ask if they are qualified to advise on a product if they offer it.
  6. Supporting Mortgage Application: The mortgage broker will assist you with the completion of the mortgage application. They will effectively provide a validation system to ensure all forms and criteria have been correctly met, a little bit like the Post Office when they pre-vet a passport for you. It's a good feature that avoids any unexpected delays due to incorrect form filling or errors.
  7. Coordination and communication: The mortgage broker should liaise directly with the estate agent, mortgage lender and valuers where applicable, providing timely, clear correspondence with the borrower
  8. Market Knowledge: The mortgage broker should maintain up-to-date industry knowledge and have full comprehension of new products, trends and shifts within the mortgage market, mortgage legislation and its associated products

Are all Mortgage Brokers the same?

Short answer - NO. Whilst all mortgage brokers must be qualified, the range of products depends on how they are employed:

  • Employed by Estate Agent: Will most likely provide a range of mortgage products that the estate agents prefer. Whilst the range may be wide, it may be more selective, depending on the rates/agreements that the estate agents agree with mortgage lenders.
  • Employed by Mortgage Lender: Will provide a choice of mortgage products from the lenders portfolio, for example if you call Lloyds to discuss a mortgage, you should be connected with a mortgage broker who will then match you to the best product that they offer.
  • Self Employed: Self employed or dedicated mortgage broker companies typically provide the widest choice of mortgage products. It is in their interest to provide the best deals for home buyers as their service is their product, if it wasn't financially viable they wouldn't be in business. You are also more likely to access mortgage deals that are not available on the high street, certain mortgage brokers leverage they weight to negotiate mortgage deals that are advantageous to their clients.

Why should I use a Mortgage Broker

An advantage of mortgage brokers is they have access to many mortgage lenders. Mortgage brokers can also advise you on the most suitable type of mortgages based on your need and financial situation. Also, since mortgage brokers are involved in mortgages on a full-time basis, they understand the lending criteria of different mortgage lenders. This way, you can apply to a mortgage lender who is best suited to your specific situation and avoid any unnecessary rejections.

What is better, a Mortgage Broker or an Independent Financial Advisor?

This is a common question we are asked. The reality is that they are both well positioned to provide you sound advice on mortgage products. Mortgage brokers tend to be more focused on mortgages so do tend to find the better deals (though not always), they are however limited to dealing with mortgages. Independent Financial Advisors (IFA) are however qualified to provide financial advice on a range of products, this may suit your needs better. An IFA is normally a better choice if your are self employed as they can offer broader financial advise about your other financial interests and will have access to mortgage lenders with a wider portfolio including those who target company directors, contractors and so forth.

Where do I find a Mortgage Broker?

Note that it is important to find a good mortgage broker. Your estate agent may recommend specific mortgage brokers, but you are not obliged to use the recommended mortgae brokers even if you buy a property through the same estate agent.

It is a good idea to look for some independent mortgage advisors as they can provide you with unbiased advice on different mortgage products. You can also check with your existing connections for any references of mortgage brokers that they know or, better, have used when buying their own homes.

How do I know if a Mortgage Broker is good?

Check if a Mortgage Broker has access to all deals

Before shortlisting a broker, you need to check if the broker has access to all lenders in the UK. You may get one of the three responses listed below:

  • The brokers may say no because they may be tied to a specific lender or a small group of lenders. This means they will have access to only a few deals and may lose out on other attractive deals.
  • The brokers may say they have access to all deals available to brokers. This means they will exclude any deals directly available to the general public as they may not be able to earn a commission on such deals.
  • The brokers may say they have access to all lenders. While it's practically impossible to check all deals and mortgages on offer in the UK, such brokers can provide you with a wider range of options as opposed to the earlier two.

Based on the responses you can decide whether you want to deal with the broker or not.

Ask the Mortgage Broker about fees

Upon shortlisting, you need to check if there is a fee for using the broker's services. Brokers make money either through a commission from the lender or by charging a fee to the borrower.

Mortgage Broker Commission

Most lenders pay a 'procuration fee' to the broker, which is typically 0.35% of the loan amount. The higher the loan amount, the greater the commission to the broker. You should note this is a transaction between the lender and broker, and it doesn't affect your borrowing costs.

Brokers are legally obligated to inform borrowers about how much commission they are going to charge the lender. You can find this information in the Key Facts illustration.

Mortgage Broker Fees

Some brokers may charge a fee to the borrowers. This could be in addition to the commission earned from lenders. Independent brokers offer the borrowers a choice between a fee and a commission.

Most mortgage brokers will charge a fee of around 1% of the loan amount. Stay away from brokers who are charging more than 1%. Also, avoid brokers who are asking for a fee prior to the transaction because you may end up paying even if your deal doesn't materialise.

You should also check if the broker has the necessary qualifications for advising. CeMAP (Certificate in Mortgage Advice and Practice) is the most accepted qualification for brokers. A qualified broker will understand the requirements and eligibility of the borrower in detail and advice only on the most suitable products. Going to a qualified broker can reduce the borrower's risk. If a qualified broker provides you with incorrect advice, you can complain to the Financial Ombudsman, and they will perform an investigation on the broker.

Some examples of independent mortgage advisors are Mortgage Advise Bureau or John Charcoal. London & Country mortgages doesn't charge a fee to the borrowers and has access to all deals, which are available only to brokers and not to the general public. You can also check websites like for a list of mortgage brokers.

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