Remortgaging is often a necessary step to secure a better rate on your mortgage, and engaging a professional mortgage broker can save significant time and money. However, determining how much does a mortgage broker charge for remortgaging can be confusing, as fees are not standardised across the industry.

TL;DR: Mortgage broker fees for remortgaging vary widely based on their business model, ranging from £0 (commission-only) to £2,500 or more for complex cases. Most brokers charge either a flat fee (typically £500–£1,000) or a percentage of the loan amount (usually 0.3% to 1%). It is essential to confirm the exact fee structure, including any potential lender commission, before agreeing to their services.

Understanding How Much Does a Mortgage Broker Charge for Remortgaging in the UK?

Remortgaging involves switching your existing mortgage to a new deal, either with your current lender or a completely new one. While you can approach lenders directly, a professional mortgage broker can navigate the market, identify the most suitable products, and handle the application process on your behalf. Understanding their costs is crucial for accurate budgeting.

Broker fees are regulated and must be disclosed transparently upfront, but the method of charging differs significantly. Generally, there are three primary models used by mortgage brokers in the UK.

The Three Main Mortgage Broker Fee Structures

When investigating the charges for remortgaging advice, brokers will fall into one of the following categories:

1. Commission-Only Brokers (Fee-Free to the Client)

These brokers do not charge the client a direct fee for their services. Instead, they receive payment, known as a ‘procuration fee’, directly from the mortgage lender when the new deal completes. For the client, the service is effectively free at the point of use.

• Benefit: Zero upfront cost.
• Consideration: While many fee-free brokers offer access to a broad range of deals (often ‘whole of market’), some may be restricted in the number of lenders they can use, potentially limiting your options compared to a paid adviser.

2. Fee-Only Brokers

These brokers charge the client a specific fee regardless of whether they also receive commission from the lender. If they do receive commission, this fee is often deducted from the client’s bill, or the commission is passed back to the client.

• Benefit: High transparency and often provide advice on complex or niche cases that might not yield large commissions from standard lenders.
• Fee Structure: Usually a flat fee or an hourly rate, but the flat fee is most common for remortgaging.

3. Hybrid or Combination Fee Brokers

This is arguably the most common model. The broker charges a smaller fee to the client (e.g., £300) to cover their initial research and setup costs. They then also accept the procuration fee from the lender to cover the rest of their work.

• Benefit: Ensures the broker is compensated even if the deal falls through, and clients benefit from generally lower out-of-pocket costs compared to fee-only models.
• Transparency Check: Always ask how much of the total cost is covered by the lender commission and how much you are required to pay directly.

Typical Costs: Flat Fees vs. Percentage Fees

If your broker charges a fee, it will typically be calculated in one of two ways:

Flat Fee Structure

A flat fee means the charge is a fixed amount agreed upon upfront, regardless of the size of the loan. This offers certainty regarding budgeting.

• Typical Range: For a standard residential remortgage, flat fees usually fall between £500 and £1,000.
• Higher Fees: For complex cases—such as specialist buy-to-let, adverse credit remortgages, or complex income scenarios—fees could rise to £1,500 or even £2,500, reflecting the increased time and specialist expertise required.

Percentage Fee Structure

Less common for standard residential remortgaging but sometimes used, especially for large loan amounts, the broker’s charge is calculated as a percentage of the total amount borrowed.

• Typical Range: This is generally between 0.3% and 1% of the loan value.
• Example: On a £200,000 remortgage, a 0.5% fee would equate to £1,000.

If you are exploring remortgaging a very high value property, you may find that a fixed flat fee offers better value than a percentage charge.

Factors Influencing the Broker’s Charge

The amount a broker charges is not arbitrary. It is influenced by several factors relating to the client, the complexity of the case, and the broker’s business model:

1. Case Complexity: If you have an unusual income structure (self-employed with less than two years of accounts, or complex bonus structures), or if you have adverse credit history, the work required to place the mortgage is significantly higher. Brokers will charge more for this expertise.
2. Loan Size: While a flat fee is transparent, smaller loans might sometimes attract a slightly higher percentage fee, as the broker needs to ensure their time is appropriately remunerated. Conversely, large loans may benefit from a capped flat fee.
3. Broker Access (Whole of Market vs. Restricted): Brokers with access to the ‘whole of market’ tend to charge higher fees because they invest more time and resources into searching across dozens of potential lenders, including niche providers. Restricted or tied brokers, who only advise on products from a limited panel, may be cheaper or fee-free.
4. Service Level: Some brokers offer enhanced levels of service, handling all solicitor liaison and valuation booking, which may justify a higher fee.

Ensuring You Get Value and Transparency

The cheapest option is not always the best. A broker who charges a small fee but secures you a rate that saves you thousands of pounds over the fixed term is offering excellent value. When comparing brokers, focus on the total cost of the mortgage package, not just the broker’s upfront fee.

All regulated financial advisers in the UK must clearly outline their fee structure and scope of service in a document known as a Key Facts Illustration (KFI) or Initial Disclosure Document (IDD). Always request this document before committing.

Furthermore, preparation on your part can speed up the process and potentially reduce the broker’s workload. This includes having all necessary documents ready and ensuring your financial profile is accurate. Before approaching a broker, it is wise to check your credit history to identify and resolve any issues that might affect your eligibility. Get your free credit search here. It’s free for 30 days and costs £14.99 per month thereafter if you don’t cancel it. You can cancel at anytime. (Ad)

For additional guidance on choosing the right financial adviser, the government-backed service MoneyHelper provides impartial advice on what to look out for, including fee transparency and regulatory status. You can find more information on how to choose a mortgage adviser on the MoneyHelper website.

When and How Do You Pay the Broker?

The timing of payment depends on the fee model:

• Upfront Commitment Fee: Some brokers require a small payment immediately upon beginning work, especially for complex cases, to secure their time. This is usually non-refundable if you withdraw.
• Application Fee: The majority of the fee is typically paid when the application is submitted to the lender.
• Completion Fee: In some cases, the fee is only payable upon successful completion of the remortgage.

Always clarify the refund policy. If the broker charges you upfront but is unable to secure a suitable offer, you should know whether you are entitled to a partial or full refund.

People also asked

Can I remortgage without a broker?

Yes, you can approach lenders directly, often called ‘execution-only’. However, using a broker gives you access to a wider range of products, including exclusive deals, and provides professional advice on suitability, which lenders cannot offer directly.

What is a procuration fee?

A procuration fee is the commission paid by the mortgage lender directly to the broker for successfully introducing and processing a new customer’s mortgage application. This fee is how fee-free brokers cover their operating costs.

Is a percentage fee or a flat fee better?

Neither is inherently better; it depends on your loan size. If you are remortgaging a large amount (e.g., over £300,000), a capped flat fee is generally more cost-effective than a percentage fee. For smaller loans or highly complex scenarios, a flat fee may be standard.

Are fee-free remortgage brokers truly free?

Yes, for the client, the service is free as they pay no direct fees. However, the broker is still compensated via the lender’s procuration fee. The client should ensure a fee-free broker offers a sufficient range of products to justify the lack of direct cost.

Does the cost of the broker depend on my credit score?

The broker’s initial fee does not usually change based purely on your credit score. However, if your credit history is complex or poor, the case is harder to place, meaning you might need to use a specialist broker who charges a higher flat fee due to the increased workload and expertise required.

Conclusion: Comparing Your Remortgaging Options

When searching for a broker to assist with your remortgaging, the primary focus should be on finding a professional who is competent, transparent, and regulated by the Financial Conduct Authority (FCA). While the question “how much does a mortgage broker charge for remortgaging?” is important, the true value lies in the savings they achieve on your monthly repayments and the appropriateness of the product they secure for your financial circumstances.

Always compare the total cost, including the broker fee, lender arrangement fees, and solicitor charges, to determine the most financially sound choice for your remortgaging journey.