How much should I expect to pay a broker ?

[Rebecca Thomas]

Hi ,

I have a small portfolio of buy to let property and have always sourced and sorted the mortgages myself . This is getting harder as we have more than 5 properties and the options are narrower. I think i need some help but what should I expect to pay ? I spoke briefly to one Broker who quoted £1,500 which I thought was extortionate or is that the norm ?

Any advice appreciated .

[John Carey-Shields]

Hi Rebecca, the complex nature of portfolio lending has prompted a rise in broker costs simply due to the volumes of work involved, however in my professional opinion £1,500 is expensive.

Our firm charges a third of that for even the most complex of cases but the standard fee is £295.

I’m self employed so my fees cover my admin costs and time and we receive payment from the lender also. 

Hope this answers your question? Broker market is saturated and competitive. More importantly the costs can vary based on your location. I’m based in Liverpool. 

Hope this answers your question?! 
 

John 

[Siruskey]

I have 5 and 2 in the pipeline. I don't pay anything like that. I have also not had any problems getting a mortgage. 

I keep mentioning him on here but I wouldn't use anyone else other than @simon allen

I have a reliable electrician, and plumber who are worth their weight in gold. I will wait for them if they are busy. I put Simon in the same bracket, he is a key part of my network. 

I get much more than I pay for with him. 

Regards 

Craig 

[Simon Allen]

13 hours ago, siruskey said:

I have 5 and 2 in the pipeline. I don't pay anything like that. I have also not had any problems getting a mortgage. 

I keep mentioning him on here but I wouldn't use anyone else other than @simon allen

I have a reliable electrician, and plumber who are worth their weight in gold. I will wait for them if they are busy. I put Simon in the same bracket, he is a key part of my network. 

I get much more than I pay for with him. 

Regards 

Craig 

Thanks @siruskey. Very kind of you.

[arbee]

Don't brokers just get paid by the bank? On my mortgage illustration break down it shows a product fee and then the commission that is paid to the broker for doing the leg work. I was under the assumption this fee is based on the size of the loan, but either way the client doesn't pay this additionally, but is paid to the broker by the bank.

[davidfarmer]

1 hour ago, arbee said:

Don't brokers just get paid by the bank? On my mortgage illustration break down it shows a product fee and then the commission that is paid to the broker for doing the leg work. I was under the assumption this fee is based on the size of the loan, but either way the client doesn't pay this additionally, but is paid to the broker by the bank.

Generally that is true but be aware that this can influence which lender the broker proposes to you. The FCA ask that brokers declare what they get paid and what they may have been paid by other providers. I guess cost really depends on the value the person adds

[arbee]

16 hours ago, davidfarmer said:

Generally that is true but be aware that this can influence which lender the broker proposes to you. The FCA ask that brokers declare what they get paid and what they may have been paid by other providers. I guess cost really depends on the value the person adds

True.  Always best to do a bit of research once your broker comes back to you with a product.

From what I understand, there is no way to avoid this commission is there? As far as I know there are no cashback mortgage brokers out there that will give you a cut of their commission if you go with them. In fact if you go direct to the bank offering the product, the only bank wins as they no longer have to pay your broker a fee! So they make even more money! I'd rather go with a broker and let him earn a cut than the bank taking it all. And also going direct to bank each time means more work for you, in terms of paperwork etc each time you get a mortgage.

As long as they are honest and offer whole of market, the fee is whatever the bank for that recommended product is. So not sure what OP means by a broker quoting a fee? Does she mean that's what was shown in the illustration, and she finds it excessive? Or is this a separate adviser fee?

[davidfarmer]

23 minutes ago, arbee said:

True.  Always best to do a bit of research once your broker comes back to you with a product.

From what I understand, there is no way to avoid this commission is there? As far as I know there are no cashback mortgage brokers out there that will give you a cut of their commission if you go with them. In fact if you go direct to the bank offering the product, the only bank wins as they no longer have to pay your broker a fee! So they make even more money! I'd rather go with a broker and let him earn a cut than the bank taking it all. And also going direct to bank each time means more work for you, in terms of paperwork etc each time you get a mortgage.

As long as they are honest and offer whole of market, the fee is whatever the bank for that recommended product is. So not sure what OP means by a broker quoting a fee? Does she mean that's what was shown in the illustration, and she finds it excessive? Or is this a separate adviser fee?

I assume (and that's a dangerous thing!) that it is a separate fee. Quite often we will charge a separate fee but the cases we have are normally commercial in nature and more complex with the client happy to pay for the value we add and the load we take off their shoulders. I don't see why the broker should cut the client in on what they earn, they have a living to make and can probably access deals and lenders you won't be able to direct. You are paying for the advice and sourcing the deal, like anything you can do it yourself it just comes down to time and willingness.