Fee-free mortgage brokers: are they really free, and how do they get paid?

Are mortgage brokers free? Many are. A fee-free broker is paid a commission, called a procuration fee, by the lender when your mortgage completes, so you pay nothing for the advice. Other brokers charge you a fee, and some charge a fee and take the lender's commission too. Here's how each model works, what it means for the rate you get, and what to check before you choose.

Updated 17 September 2026. Figures are for illustration and general guidance, not personal advice.

Fee-free broker

£0 to you

Paid by the lender when your mortgage completes, typically around 0.35% to 0.45% of the loan

Fee-charging broker

Often £300–£500

Some charge a percentage, up to around 1% of the loan, and many also receive the lender's commission

Are mortgage brokers free?

Some are, some aren't. Brokers are usually paid in one of three ways:

• Commission only (fee-free). The lender pays the broker. You pay nothing for the advice or the application.
• Fee only. You pay the broker directly, as a flat fee, an hourly rate or a percentage of the loan.
• Fee plus commission. The broker charges you a fee and also receives the lender's procuration fee. Some knock the commission off the fee, others don't.

None of these is wrong. What matters is knowing which one you're dealing with, and the rules say you must be told.

How do mortgage brokers get paid?

1. You get adviceThe broker looks at your circumstances and recommends a mortgage.
2. The lender approves itThe application goes through underwriting and a mortgage offer is issued.
3. Your mortgage completesThe money is released and the purchase or remortgage goes through.
4. The lender pays the brokerA procuration fee is paid to the broker. With a fee-free broker, that's their only payment.

The Financial Conduct Authority's mortgages market study found the median procuration fee was around 0.4% of the loan. More recent industry comment puts it at roughly 0.35% to 0.45% for standard residential lending, so about £700 to £900 on a £200,000 mortgage. It can be higher for buy-to-let and specialist lending.

If you take out life insurance, critical illness cover or income protection through a broker, the adviser is usually paid commission by the insurer as well.

Does a fee-free broker cost you more?

Not usually. The procuration fee is a cost the lender pays to receive applications through brokers, and most lenders offer the same rates whether you apply direct or through an adviser. Using a broker doesn't normally add anything to your rate or your loan.

• Direct and broker-only deals exist. Some deals are only available if you go straight to a lender, and some are only available through brokers. A broker who doesn't look at direct-only deals must tell you.
• Commission is fairly similar across lenders. The FCA looked at whether differences in procuration fees pushed brokers towards more expensive mortgages and found little evidence that they did.
• You can see what the lender pays. The amount is normally shown in your mortgage illustration, the European Standardised Information Sheet (ESIS).

Advisers also have to recommend a mortgage that's suitable for you, whoever pays them, and under the FCA's Consumer Duty firms must act to deliver good outcomes for customers.

Fee-free vs fee-charging brokers compared

A fee doesn't guarantee better advice, and fee-free doesn't mean a lighter service. Some firms charge because they spend a lot of time on very unusual cases, or work in areas such as some commercial or bridging lending where lender commission is lower or less common.

Whole of market, restricted or tied?

How a broker is paid and how many lenders they use are separate questions. They must tell you both at the start.

Brokers must tell you how they're paid

Under FCA rules, a mortgage adviser must tell you before giving advice whether their range of mortgages is limited, any fees they'll charge, when those fees are payable or refundable, and whether they'll receive commission from the lender. If you haven't been told, ask.

Scams often copy the names of real firms. Our guide on how to spot mortgage scams explains what to look out for.

Fee or no fee mortgage?

This is a different fee. Many mortgage deals carry a product or arrangement fee charged by the lender, often around £1,000, however you apply. Deals without a fee usually have a slightly higher rate.

Which is cheaper comes down to maths, and the biggest factor is loan size. A lower rate saves more on a large mortgage, so a fee is easier to justify. On a smaller loan, the no-fee deal often wins.

Worked example: £200,000 over 2 years

Here the no-fee deal is about £200 cheaper over two years, even though the monthly payment is £24 higher. Paying the fee saves around £800 in interest, which isn't quite enough to cover it.

Illustrative only, not actual products. Assumes a £200,000 capital repayment mortgage over 25 years, with the fee paid upfront. Rates are chosen to be close to the Moneyfacts average 2-year fix of 5.73% on 15 September 2026. Total cost is interest plus fee over the 2-year deal.

When does a £999 fee pay for itself?

Extra cost of Deal A (5.50% + £999 fee) compared with Deal B (5.70%, no fee) over 2 years, by loan size

Should you add the fee to the loan?

Many lenders let you add the product fee to the mortgage instead of paying it upfront. It helps if cash is tight, but you then pay interest on the fee for as long as it stays on the loan. In the example above, adding the £999 fee costs roughly £100 more over the two years than paying it upfront, and you'd still owe most of the fee at the end.

Also check whether any booking fee is refundable, and whether the deal includes cashback or free legal work. Our guide to looking beyond the interest rate goes into more detail, and our latest rates update covers where rates are now.

How Quick Mortgages works

We're a fee-free broker. The lender pays us a procuration fee when your mortgage completes, and you never pay us a fee, whether you go ahead or not. That applies to purchases, remortgages, buy-to-let and specialist lending, and to reviewing your protection alongside your mortgage.

We offer whole-of-market advice from a panel of more than 110 lenders, from the high street to specialists, and we're not tied to any of them. We'll compare fee and no-fee deals for your loan size, so you can see the total cost side by side. More about how we're paid.

Cherry Street Holdings Ltd, trading as Quick Mortgages, is authorised and regulated by the Financial Conduct Authority, firm reference 841262. We're based in Birmingham and help people across the UK.

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Frequently asked questions

Are mortgage brokers free in the UK?

Many are. Fee-free brokers are paid by the lender when your mortgage completes. Others charge a fee, sometimes as well as receiving the lender's commission.

How much does a mortgage broker cost?

Nothing, if they're fee-free. Fee-charging brokers often charge a flat fee of a few hundred pounds, and some charge a percentage of the loan, up to around 1%.

Why do some mortgage brokers charge a fee and others don't?

It's a business choice. Some firms charge for the time very complex cases take, or work where lender commission is low. Others are funded entirely by lender commission.

Will I get a worse rate through a fee-free broker?

Not usually. Most lenders offer the same rates direct and through brokers, and the lender pays the procuration fee itself. Some deals are only available direct and some only through brokers.

Is a fee-free mortgage broker whole of market?

Not necessarily. Payment and product range are separate. Check whether the broker is whole of market, uses a restricted panel, or is tied to one lender.

Is it better to get a mortgage with or without a fee?

It depends mainly on loan size and deal length. On larger loans a lower rate with a fee often works out cheaper, and on smaller loans the no-fee deal often wins. Compare the total cost over the deal period.

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Disclaimer:

This article is for general guidance purposes only and does not constitute legal, financial, or professional advice. Mortgage products and their terms can vary, and it is important to seek advice from a qualified, regulated professional who can assess your individual circumstances. Please ensure you consider your unique needs before making any financial decisions.

While every effort is made to ensure that the information provided on this blog is accurate and up-to-date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. We recommend verifying any information before acting on it and seeking tailored advice.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.