- Average mortgage broker fees rose to £643 over the past year.
- More than half of homebuyers paid between £500 and £700 for broker services.
- Mortgage approvals fell to 60,000 in January, below the recent six-month average.
The cost of using a mortgage broker in the UK has risen sharply over the past year, with average fees increasing by more than 28 per cent to £643, according to research by Boon Brokers.
The study found that most homebuyers still pay a flat fee when arranging a mortgage through a broker. Around 56 per cent of buyers paid between £500 and £700, with £500 emerging as the most common charge.
Fixed fees were the most widely used pricing structure, accounting for 44 per cent of cases. Other brokers used percentage-based charges instead. About 29 per cent calculated fees based on the size of the loan, while 19 per cent tied the charge to the value of the property.
There also appears to be a shift in when brokers collect their fees. The research suggests 85 per cent of brokers now charge only after the full mortgage application has been submitted, indicating that payment is increasingly happening later in the process.
Not everyone pays the same
Fees can also vary depending on where buyers live. According to the survey, lower broker charges were more common in Northern England, Wales and Northern Ireland, compared with other regions.
The findings also suggest many buyers may not fully understand how broker pricing works. Some potential homeowners are unaware that certain mortgage brokers operate without charging direct fees, while others assume paying a fee gives access to a wider range of lenders.
This confusion around broker costs comes at a time when mortgage activity in the UK has slowed slightly.
Figures from the Bank of England show that mortgage approvals for house purchases dropped to 60,000 in January, below the previous six-month average of 64,100.
A quieter housing market in the background
Borrowing activity has also cooled slightly. Net mortgage borrowing by individuals fell to £4.1bn in January, compared with £4.5bn in December, which also sits below the recent six-month average of £4.5bn.
At the same time, the interest rate on newly drawn mortgages edged down slightly to 4.09 per cent in January, compared with 4.15 per cent in December.
Taken together, the figures suggest an unusual mix in the housing market. Borrowing costs have eased slightly and activity has slowed, yet the fees paid to mortgage brokers appear to be rising, potentially adding another cost for buyers already navigating a complicated property market.
