Should Mortgage Brokers Charge Fees? A Fresh Perspective
The debate around whether mortgage brokers should charge fees is one that never seems to go away. Some brokers swear by charging fees, while others argue that working solely on lender commissions is the way forward. Having worked with many brokers, my perspective on this has evolved over time.
So, should you be charging fees? In most cases, yes.
But, as with most things in business, it’s not a one-size-fits-all situation. Let’s break it down.
What Are the Benefits of Charging Broker Fees?
Many brokers worry that charging fees will scare off potential clients. But in reality, charging a fee often increases your perceived value and helps filter out non-serious clients.
1. How Do Fees Demonstrate Your Value as a Mortgage Broker?
Far too many brokers undervalue themselves. If large corporate brokers charge upwards of £799 while offering a limited range of lenders, why shouldn’t you charge for your expertise and broad market access?
A structured fee tells clients that your advice is valuable and worth paying for, just like any other professional service.
2. Do Higher Fees Attract Better Clients?
Bargain hunters often bring headaches. Clients who are willing to pay a fair fee tend to be more engaged, serious about their mortgage, and ultimately easier to work with.
3. Can Charging Fees Help Future-Proof Your Business?
If your fees haven’t changed in years, you’re effectively earning less due to inflation. A simple way to stay ahead is by increasing your fee by £50 annually—small enough for clients to accept but impactful for your bottom line.
Example: If you charge £495 now, increasing it to £545 next year makes little difference to clients but keeps your revenue strong.
4. Do Fees Provide Financial Stability?
Relying purely on lender commissions can create inconsistent cash flow. A structured fee model ensures predictable income, allowing you to reinvest in your business and plan for growth.
When Might It Make Sense to Skip Fees?
While fees make sense for most brokers, there are scenarios where they might not be necessary.
1. Should New Build Mortgage Brokers Charge Fees?
In the new-build sector, fees are often covered by developers or lenders. In this case, charging a client could make you less competitive.
2. Do Referral-Based Brokers Need to Charge Fees?
If you’ve built a strong referral-based business where clients expect no fees, suddenly introducing them could create friction. In this case, you may need to find other ways to increase revenue, such as boosting insurance sales.
How Should Mortgage Brokers Structure Their Fees?
If you’re unsure how to charge, tiered pricing can help.
Basic Service (simple remortgage) - £495
Comprehensive Service (complex self-employed cases) - £995
VIP Service (high-net-worth clients with ongoing support) - £1,500+
This lets clients choose the level of service they need while ensuring you’re compensated fairly.
Should Mortgage Brokers Charge for Product Transfers (PTs)?
PTs are a grey area. Traditionally, brokers haven’t charged for them, but with rates constantly shifting, some are introducing a rate monitoring service fee.
Instead of offering PTs for free, consider charging a small fee (£99–£199) upon completion to ensure you’re compensated for your time.
How Can Mortgage Brokers Increase Their Fees Without Losing Clients?
If you’re hesitant about raising fees, try these strategies:
Can Mortgage Brokers Split Fees into Stages? – Breaking fees into payments (application, offer, completion) makes them more manageable for clients.
How Often Should Mortgage Brokers Raise Fees? – A small annual increase (£50) keeps your fees in line with inflation.
How Can Mortgage Brokers Justify Higher Fees? – Higher prices often signal better service. Own your value with confidence.
What Extra Services Can Mortgage Brokers Offer? – Add value with protection reviews, PT monitoring, and financial guidance.
Final Thoughts: Should Mortgage Brokers Charge More?
Ultimately, the biggest barrier to charging fees isn’t client pushback—it’s broker confidence. Many brokers worry about rejection, but the truth is that most clients don’t object when they see the value.
So here’s my challenge to you: If you’re not charging fees, or if your fees are too low, consider making a change. Even a small adjustment can have a big impact on your business.
What’s your take? Do you charge fees, or are you still deciding?
