What does a mortgage broker actually do?

A mortgage broker sits between you and the pool of mortgage lenders, and their job, in essence, is to match your circumstances to a suitable mortgage product and then guide the application through to completion. What that involves in practice is worth unpacking, partly because "mortgage broker" covers a fairly wide range of actual working arrangements.

At the core of the role, a broker gathers details of your income, deposit, credit history and what you are looking to buy or remortgage, and searches the products available to find ones that fit — comparing interest rates, fees, overpayment terms and lender criteria rather than leaving you to trawl comparison sites and individual lender websites yourself. Beyond the initial search, a broker typically handles much of the paperwork, liaises with the lender, valuer and solicitor as the application moves forward, and can flag issues — such as a lender's specific criteria around self-employed income or an existing credit blip — before they become a problem partway through the process.

One distinction worth understanding before you speak to anyone is whether a broker is whole-of-market or tied. A whole-of-market, or independent, broker can in principle recommend a mortgage from any lender operating in the UK market. A tied broker works from one lender or a limited panel of lenders only — sometimes because they are employed by, or contracted to, a particular bank or estate agency group. Neither arrangement is inherently right or wrong, but it changes what you are actually being shown, so it is a reasonable and direct question to ask any broker before you proceed: are you whole-of-market, or tied to a specific panel?

How a broker is paid also varies, and understanding the two main routes helps make sense of why some brokers charge you directly and others do not. Many lenders pay a procuration fee — sometimes called a proc fee — directly to the broker when a mortgage application completes, commonly somewhere in the region of 0.35% to 0.5% of the loan amount. This is paid by the lender out of their own margin; it does not add to your mortgage rate or change the amount you actually repay. Because of this, some whole-of-market brokers charge no fee to the borrower at all, relying on procuration fees for their income. Others charge a broker fee on top, commonly a flat amount rather than a percentage — figures in the region of £300 to £700 turn up regularly in broker fee surveys, though some brokers charge nothing and others charge more for complex cases. FCA rules require brokers to disclose both their own fee, if any, and any commission they will receive from the lender, before they make a recommendation, so this is a straightforward thing to ask for in writing.

People turn to mortgage brokers in a variety of situations. First-time buyers, unfamiliar with the process and the jargon, are one common group. Others include people who are self-employed or have more complex income, where a broker's familiarity with which lenders take a more flexible view of accounts can matter; people with a poor or thin credit history, where some lenders specialise in a way that is not obvious from the high street; landlords looking at buy-to-let mortgages, which often sit outside standard residential lending; and people remortgaging who simply want a wider comparison than their existing lender's own deals. A broker's access sometimes extends to broker-only deals not available if you approach a lender directly, though this varies by lender and by broker.

None of this is a recommendation to use a broker over going directly to a lender, or a recommendation of any specific broker or product — which route suits you depends on your own circumstances, how much time you want to spend comparing options yourself, and how comfortable you are with the process. This article is general information, not financial advice. Our directory lists UK mortgage brokers by area, and it is worth asking directly whether a broker is whole-of-market or tied, and getting their fee structure in writing, before you commit to working with them.

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