TL;DR
Mortgage brokers must be FCA-authorised and disclose whether they search the whole market or a restricted panel. Brokers are paid by lenders via procuration fees typically between 0.35% and 0.5% of the loan value. This does not directly cost the borrower but can influence which products are recommended. Always verify FCA registration and ask how many lenders the broker accesses.
Last reviewed: June 2026 | Sources: FCA
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Mortgage Key Facts: Using a Mortgage Broker Must be: FCA-authorisedProcuration fee: typically 0.35-0.5% of loanWhole of market: not all brokers search all lendersVerify: FCA RegisterRegulator: FCA |
What a mortgage broker does and how they are paid
A mortgage broker searches available mortgage products and recommends one suited to the borrower's circumstances. They manage the application process and liaise with the lender. Brokers are paid a procuration fee by the lender on completion, typically between 0.35 and 0.5 percent of the loan value. On a £200,000 mortgage this is £700 to £1,000 paid by the lender. Some brokers also charge the borrower a direct fee, disclosed at the outset.
The risks most people do not check
Not all brokers search the whole market. Brokers are required to disclose whether they are whole-of-market, restricted to a panel of lenders, or tied to a single lender. A restricted broker may not find the best available rate. Always ask explicitly how many lenders the broker accesses and whether any lenders offer direct-only products not available through brokers.
Procuration fees create potential conflicts. Different lenders pay different procuration fees. While brokers have a regulatory obligation to recommend the most suitable product, the procuration fee structure means higher-fee lenders may be presented more favourably in ambiguous cases. This is a structural conflict that disclosure alone does not eliminate.
Broker fees vary significantly. Some brokers are fee-free to the borrower (paid entirely by lender procuration fees). Others charge £300 to £1,500 directly. Fee-charging brokers are not necessarily better or more independent than fee-free brokers. The procuration fee is received in both cases.
Unsuitable advice has FCA consequences. Mortgage advice is regulated under FCA MCOB rules. If a broker recommends a mortgage that is not suitable for your circumstances and you suffer loss as a result, you have a regulatory complaint route via the Financial Ombudsman Service and potentially FSCS protection if the firm fails.
What the small print usually says
The Initial Disclosure Document provided by a broker must state their regulatory status, the scope of their search, how they are remunerated, and whether they charge a client fee. Read this document before proceeding and verify the FCA registration number on the FCA register at register.fca.org.uk.
Who benefits from using a broker and who does not
Brokers add most value for borrowers with complex circumstances (self-employed, recent credit issues, unusual property types, large loans), first-time buyers navigating an unfamiliar process, and those who lack time to research the market independently.
Straightforward remortgages for borrowers with standard employment and clean credit can sometimes be arranged more efficiently directly with lenders, particularly product transfers with existing lenders where no broker is involved.
What to verify before appointing a broker
Check FCA registration on register.fca.org.uk. Ask whether they are whole-of-market or restricted and which lenders they cannot access. Ask how they are remunerated and the total cost including any client fee. Ask how many mortgage products they have access to and how they select a recommendation.
Where to complain if advice is unsuitable
Unsuitable mortgage advice complaints go to the firm's internal complaints process first, then to the Financial Ombudsman Service if unresolved within eight weeks. FSCS protection of up to £85,000 applies if the authorised firm has failed.
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Disclaimer This article is for information only. Mortgage advice is regulated by the FCA. Always verify a broker's FCA authorisation before proceeding. Kael Tripton Ltd is not regulated by the FCA. |
Frequently asked questions
How do I check if a mortgage broker is FCA-authorised?
Search the FCA Financial Services Register at register.fca.org.uk using the firm's name or registration number. The register shows the firm's regulatory status, permissions and any disciplinary history.
What is the difference between a tied broker and a whole-of-market broker?
A tied broker recommends products from a single lender only. A multi-tied broker accesses a panel of lenders. A whole-of-market broker can access products from across the market, though some direct-only lender products remain unavailable through any broker.
Can I use a broker and also apply directly?
You can research both options simultaneously. However, multiple mortgage applications in a short period trigger multiple hard credit searches, which can affect your credit score. Keep applications to a minimum until you have identified the preferred product.
What is a procuration fee and does it cost me anything?
A procuration fee is paid by the lender to the broker on completion. It does not directly reduce the amount you borrow or appear on your mortgage statement. However, it is ultimately funded within the lender's commercial model and contributes to the cost of mortgage lending generally.
Is a mortgage broker the same as a financial adviser?
No. A mortgage broker is authorised specifically for mortgage advice. A financial adviser holds broader authorisation covering investments, pensions and other regulated products. Some financial advisers also hold mortgage permissions but the two roles are distinct.
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Sources FCA Register |
