A mortgage advisor may seem like an unnecessary expense in our age of infinite information, accessible at the touch of a button. But it’s worth remembering there’s a dizzying array of mortgage deals out there. 

Some are offered by specialised lenders who may not come up in searches. Some look like they’re cheaper than others, or have lower interest rates, but then hit you with hidden fees later on. And those mortgages you see in comparison tables? You have no reliable way of knowing if you’re even eligible for those deals.

This is where reliable mortgage advice can help you. A good mortgage advisor can reduce stress and wasted time in the short term, while saving you thousands of pounds and protecting you from unnecessary legal and financial risk in the long term. 

But it can be hard to know what you should be paying for mortgage advice you can trust.

This guide will take you step by step through the average costs of mortgage advice in the UK, and answer these questions:

  • What is the average cost of a mortgage advisor in the UK?
  • What are the different types of mortgage advisors?
  • What are the different types of fees that independent mortgage advisors charge? 
  • What should a mortgage advisor’s fees cover? 
  • What if my situation is complicated?
  • Can I get free mortgage advice that is still independent?

What is the average cost of a mortgage advisor in the UK?

For relatively straightforward cases, mortgage advice usually costs somewhere around £500. Or alternatively, between 0.3% and 1% of your total mortgage value – if you opt for an advisor with a fixed rate rather than flat fee. 

There are options to get mortgage advice for free, but this can sometimes mean that the advice isn’t completely independent. 

But it all hinges on what kind of advisor you talk to...

Habito is one of the few places that homebuyers can get truly independent mortgage advice, free of charge. That’s because like all brokers, we earn a commission from lenders once the deal is sealed. But unlike a lot of other brokers, we don’t charge our customers a fee on top. 

Let’s take a look at the different types of advice you can get.

What are the different types of mortgage advisors?

Tied or “multi-tied” mortgage advisors are tied to a lender or group of lenders, and they’ll advise you on the best mortgage deals that their own lender offers. They don’t have access to info about other lenders’ deals, and they won’t be able to recommend (or even tell you about) mortgages from other providers, including the major banks and building societies. 

These advisors often work free of charge, because they’re paid by the lender they work for. But taking this route means that you might miss out on information about mortgage deals that are better suited to your situation.

Independent mortgage advisors (also known as “whole-of-market mortgage brokers”) are independent financial advisors with a specialised knowledge of mortgages. They can advise you on – and actually get you – mortgage deals from across the whole market. 

These include options that you might not have been able to get hold of otherwise. That’s because some banks offer exclusive rates to brokers that they don’t even offer their own customers. Hard to believe, but true. Independent mortgage advisors can also advocate and negotiate with lenders on your behalf. 

Independent advisors often charge for their services. (Note: Habito doesn’t).

It’s a good idea to check that your advisor or broker is fully independent before you take their recommendations. And while you’re at it, it’s also wise to confirm that everybody you work with is regulated by the FCA (Financial Conduct Authority).

Time to toot our own horn: Habito is a whole-of-market, FCA-regulated independent broker. We don’t charge homebuyers any fees for the advice we give. Instead, we earn commission from the lender when we secure you the deal you want. 

What are the different types of fees that independent mortgage advisors charge? 

Independent mortgage advisors can charge a flat fee, or a fixed rate fee. They might also earn commission. Or perhaps some combination of all three.

For those who charge a flat fee, this is often in the region of £500. Some may give a range, from around £300 to £600, but it shouldn’t typically be much more than that. The advantages of a flat fee are that it’s predictable and easy to budget for. But it might also be payable upfront, which some homebuyers naturally prefer to avoid.

Fixed rate fees are usually a fixed percentage of the total mortgage value, usually between 0.4% and 1%. For example, a 0.75% fee on a £250,000 mortgage would mean a charge of £1,875. These can work out slightly higher, but you often only have to pay them when you complete. 

If you’re taking out a small mortgage and your situation is straightforward, you might be able to find a mortgage advisor or broker for less than the £500 average. 

It’s always wise to check if there are hidden rates in the fine print. If anything complicates the process, will the amount your broker charges you go up? If they spend more time on your case, will you have to pay more? Make sure you understand the charges fully before agreeing to press ahead.

Some more information about commissions

Most independent mortgage advisors get paid a commission by the lender you ultimately choose as your mortgage provider. This is sometimes known as a procuration fee, and is around 0.35% of the mortgage value.

Some brokers who work for commission might still charge you a fee on top. That might be an upfront flat fee for beginning their search. It might be a refundable fee, that they pay you back if they don’t get you a mortgage.

Any mortgage advisor or broker should give you a written quote before you accept their fee or rate. And if they do charge a fee, they should make clear whether you’re required to pay upfront, or when you complete. Ask if there are fees for extra time spent on your application.

Reminder: Habito is free. We don’t charge homebuyers anything for our advice. We earn commission from the lender of your choice, once you’re happy that the mortgage deal we’ve found is the right one for you. Our advice is totally independent, so you know you can trust it.

What do an independent mortgage advisor’s fees cover?

The purpose of a mortgage advisor is to make buying a house cheaper and easier for you. 

Their fees should include (but it’s always worth checking):

  • Advising you on the type of mortgage you need
  • Advising you on interest rates, and helping you find a mortgage with the best interest rate available for your budget
  • Comparing mortgage deals from across the whole market to find the best one for your needs and circumstances
  • Advising you on, and negotiating, the terms and conditions of your mortgage
  • Handling the paperwork for your mortgage application, including checking that your application is completed correctly with the right evidence, to minimise your risk of being rejected
  • Managing your application, including following up with the lender and making sure all deadlines are met
  • Providing general advice and answering your questions

What if my situation is complicated?

The ballpark estimate of £500 for independent advice can go up if your mortgage requirements are a bit more complex. For example, if you’re a freelancer, or if you have a lower-than-average credit score. In these cases, it can take a mortgage advisor a little more time to secure you a mortgage. There’s a chance they might charge for this extra time. 

Likewise, if you change your requirements or specifications once an advisor has started the process, they might charge for additional work that involves. It’s worth being upfront when you’re looking for a mortgage advisor to make sure they can help you if your circumstances are unusual. Always provide them with the most accurate information possible from the get-go. 

Can I get free mortgage advice that is still independent?

Absolutely, just come to Habito!