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Sometimes, and I would rather say that plainly than pretend every application needs a broker. If you are employed on a salary, have a deposit of 15% or more and a clean credit file, a high street lender may well say yes to you without me. What my £350 buys in that case is time, and access to products that are not sold direct, rather than a different answer on eligibility. If you are self-employed, have just changed jobs, have adverse credit or complex income, or your affordability is tight, the fee is normally the smallest cost in the process and the part most likely to change which lender says yes.
My fee is a flat £350 and it is only payable once the lender has issued your mortgage offer. If the case never reaches offer there is nothing to pay. The detail is on my fees page.
What does the fee actually pay for?
Research across the whole market rather than one lender’s shelf, a read of each lender’s criteria before anything is submitted, the documents checked and packaged so the underwriter has no reason to come back, and someone chasing the case through to offer. It also covers the advice itself, which is regulated and which I am accountable for.
Would the bank have said yes anyway?
For a simple case, often. The better question is whether the product that one lender offered was the right one across the whole residential mortgage market, and whether you wanted to spend your evenings finding out.
My fee is a flat £350 and is only payable once the lender has issued your mortgage offer
Fee-free brokers are still paid a procuration fee by the lender when your mortgage completes
For self-employed, new job or adverse credit cases the value is in which lender says yes
When would the high street say yes anyway?
Take an employed applicant earning £55,000, buying at £320,000 with an £80,000 deposit. That is 75% loan to value, the loan is £240,000, and £240,000 is under 4.5 times income. Two years in the same job, no defaults, no other borrowing. Most high street lenders have a product for that person and their affordability calculator would be likely to pass it.
In that case I am honest that my value is not eligibility. It is three other things.
The first is time. Comparing products means reading the fee, the rate type, the early repayment charges and the incentives on each one across dozens of lenders, and the lowest headline rate is often not the cheapest product once a £999 product fee is added. I do that in an afternoon. Doing it yourself takes evenings and a spreadsheet.
The second is product access. Some lenders only sell through brokers, and some products from lenders you have heard of are intermediary-only. A bank branch cannot show you those.
The third is what happens when something goes wrong. A lender’s own adviser will only ever tell you what that lender will do. If the case is declined at valuation or the underwriter raises a query, you start again somewhere else from scratch. With me the second lender is already lined up.
What about fee-free brokers?
Every broker, fee-charging or not, receives a procuration fee from the lender when the mortgage completes. It is a percentage of the loan, it is paid by the lender rather than by you, and it does not change the rate you pay. A fee-free broker lives on that alone. I receive it as well, and I charge £350 on top, payable only at offer. Neither model is wrong. What matters is that you know how the person in front of you is paid, and that it is written down before you sign anything.
When does a broker clearly earn the fee?
Self-employed income is the most common one. Lenders differ on whether they want two years of accounts or will accept one, on whether they use the latest year or an average, and on whether a company director is assessed on salary and dividends or on net profit. The same set of accounts can produce a maximum loan that differs by tens of thousands of pounds between two lenders. That is the work on my self-employed mortgages page.
A new job is the second. In my experience the most common cause of delay on a payslip case is applying before the first payslip in the new role exists. Some lenders will work from a contract of employment and some will not, and knowing which is which saves weeks.
Adverse credit is the third. My rule of thumb is that a default or missed payment needs to be at least six months cleared, or for a small amount, before most lenders will look at it, and the position improves each year until the entry drops off after six. Which lender will consider what is on my bad credit mortgages page. Applying to the wrong lender first leaves a search on your file and no offer to show for it.
Then there is tight affordability, where two lenders’ calculators can land a long way apart on the same income. There is complex income such as bonus, commission or overtime, which some lenders count in full and others at half. And there is buy to let, where the rent, the stress test and the ownership structure all move the answer.
In every one of these the fee is small next to the difference between the right lender and the wrong one.
What I see in practice
My honest answer is yes, even on a simple case, and not because of the product. A broker looks at the whole picture: family plans, what you want the next few years to look like, and how the mortgage fits that. And the broker stays with you through the case and afterwards, which a branch appointment does not.
Speak to an expert
If you are not sure whether your case is the simple kind, send me a summary of your income, deposit and any credit history and I will tell you straight whether the fee is worth paying.
When is going direct the better route?
If you are staying with your current lender at the end of a fixed rate, a product transfer is always my first check. It is done online, there is usually no new affordability assessment and often no fee. I will still compare it against the market for you, but if the existing lender’s product is the right one I will say so.
A small number of products are direct-only and a few lenders do not use brokers at all. If you have found one of those and the criteria fit, there is no reason to pay me to arrange it, though it is worth having someone check the rest of the market against it before you commit.
Some people simply prefer to speak to one bank they already know. That is a reasonable preference for a simple case, provided you have seen what the rest of the market looks like first.
Before you decide, ask whoever you are talking to whether they are whole of market, how they are paid, and whether the fee is still due if the case does not reach offer. The answers tell you most of what you need to know, and the other common questions are on my mortgage FAQs page.
Whether the fee is worth it depends on your situation, and for the simple case it is a fair question to put to me directly before you commit to anything. Your home may be repossessed if you do not keep up repayments on your mortgage.
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