A mortgage broker is like a matchmaker. They connect people who want to borrow money to buy a home, to the lenders who can lend that money. They can also help you with admin, advice, and support.

A broker can help you:

And/or

  • Renegotiate an existing mortgage – a process called remortgaging. 

Here’s the lowdown on what mortgage brokers do, and whether you should get one on board to help you through the home-buying process.

What can a mortgage broker help me with?

A mortgage broker’s job is to help you find the best deal on a mortgage – and then help you secure it. 

They’ll work with you to do some (or all) of the following:

  • Figure out your financial situation. How much money do you have to put down as a deposit? What is your salary? Do you have other income? Any debts or heavy expenses?
  • Search far and wide for the best mortgage deal for your needs. Mortgages are not one-size-fits-all. It’s important to find one that fits your needs and circumstances.
  • Find the right mortgage lender for you – usually a bank, building society or private company. Ideally, they should have access to a wide range of lenders, meaning they’re usually able to find exclusive deals that you wouldn’t have access to on your own. 
  • Talk through your options. Because financial deals can be complicated and full of jargon, an interpreter who knows what they’re talking about can really help. A good mortgage broker can also offer expert knowledge every step of the way, so you feel more confident about the entire process. 
  • Help you put your mortgage application together. Don’t worry. You don’t have to do it alone.

If you don’t use a mortgage broker, your other option is to go directly to a bank or lender yourself. Banks typically have advisers who can give you mortgage advice – but it’s important to remember that they’re operating in the interests of the bank and may not offer you the same range of options.

So, should I use a mortgage broker? 

The answer, in most cases, is yes. 

Mortgage brokers are regulated by the Financial Conduct Authority (FCA) which means there are standards they have to adhere to:

  • They have to act in your best interests and not their own. 
  • They must be able to prove that they’ve assessed your financial situation and found the best deals to suit your situation. 

Because brokers are regulated, you also have some protection if you receive poor advice.

A good mortgage broker will be able to:

  • Save you time. Seriously, who has the hours in the day?!
  • Save you money. They have experience and contacts. That translates into access. They should be able to introduce you to mortgage deals that you may otherwise not have been offered to you. Mortgage brokers who can choose from a wide range of lenders can often offer you better deals.
  • Offer expertise. They’re able to assess whether you’ll meet a lender’s affordability criteria and make sure you’re only applying for mortgages that you’d be eligible for. This is especially important if you have a more complex financial situation – like if you’re self-employed or have less secure income.
  • Up your chances of success. A good broker will maximise your chances of getting your mortgage approved the first time around. This is important, as an unsuccessful mortgage application can harm your chances of getting a loan approved in the future. 

It might be especially worthwhile to go for a mortgage broker if you’re a first-time buyer, or if you're still building your knowledge of financial markets, and how it all works. But even if you’re a pro, having a second pair of expert eyes on mortgage deals is always a good idea.

What if I want to go directly to a bank or lender? 

If you feel happy with the research you’ve done and have found a good deal, or if you think it will be easier to just go with your current bank, you can absolutely go for it. 

Alternatively, you can keep your options open while you search for the best deal. You can always weigh up what you’re able to find on your own with the deals a mortgage broker can offer you. That approach could be the best of both worlds, even if it’s much more time-consuming.

What you won’t get if you go it alone is advice and expertise tailored to you and your situation, should you need it, at any stage of the mortgage process. You also might not get access to all the deals a mortgage broker can provide.

Buying a home is a big legal and financial deal – and going with a broker who has the expertise to help you navigate your way through can help save you costly headaches down the line. 

Brokers can also help speed up the application process so that you can prevent delays along the way.

Sounds good. But how much will a mortgage broker cost me?

Mortgage broker fees vary from company to company and broker to broker. Some are more expensive than others. Others – like us at Habito! – are free.

There are different ways brokers make money. Every broker gets a commission from lenders when they arrange a mortgage with them, but some charge fees on top.

  1. Commission from the lender (all brokers). All brokers get a commission from lenders for arranging a mortgage, typically in the region of 0.35% of the mortgage amount. So for a £140,000 mortgage, your broker would get £490 (paid by the lender, not by you the customer).
  1. Charging a fee (some brokers). In this model, they’ll get either a fixed fee or an hourly fee for the work they do. 
  1. Commission from the borrower (some brokers). This can range from about 0.3% to 1% of the total amount you want to borrow. (Nobody should ask you for more than this.)

All mortgage brokers should be upfront about how they charge for their advice and the type of advice you’ll be receiving. 

What to look for in a mortgage broker

Here are some key questions to ask:

  • Are they listed on the Financial Services Register? This is a legal requirement and means you as the borrower are eligible for certain protections provided by the FCA. It also means you’ll get a certain standard and quality of advice. 
  • How independent are they? Ideally, you want a mortgage broker who is whole of market. That means they’re looking for mortgage deals from lenders across the entire market.

Some brokers are tied – meaning they have to choose products from one lender – or multi-tied, where they have to choose from a select few.

  • How much of their fee will come from your pocket? Are they fee or commission-based? If they’re commission-based, does their commission come from the borrower or lender?

If you’re ready to explore your mortgage options, we’re happy to help. 

Habito’s mortgage brokers are qualified experts who can support you every step of the way. We’re independent and whole of market, searching through thousands of deals from over 90 lenders. Plus, we’re completely free.

If you’d like our advice on your mortgage journey, you can get started here.

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