How Mortgage Broker Commission Works in the UK

UK mortgage brokers are paid in two ways, and most are paid by both. The lender pays a procuration fee when a mortgage completes, and some brokers also charge the client a separate advice fee. Whether a broker charges a client fee is the main reason two advisers can quote very different costs for the same mortgage.

Procuration fees: what the lender pays

The procuration fee — proc fee for short — is paid by the lender to the intermediary on completion. For residential mortgages it commonly sits around 0.35% to 0.45% of the loan amount, with buy-to-let and specialist lending often paying more. On a £250,000 mortgage at 0.40%, that is roughly £1,000, shared between the network or club and the adviser according to their agreement.

Broker fees: what the client pays

• Fee-free brokers rely entirely on the procuration fee
• Flat advice fees commonly range from a few hundred pounds to around £1,000
• Percentage-based fees, typically a fraction of a percent of the loan, are used by some firms
• Specialist, adverse-credit and complex commercial cases usually attract higher fees
• Any fee must be disclosed clearly before you commit, under FCA rules

Fee-free does not mean free advice. It means the adviser is remunerated by the lender rather than by you. What matters is disclosure: the FCA requires the broker to tell you what they will be paid and by whom before you proceed.

Is there trail commission on UK mortgages?

Largely no. Ongoing trail commission on mortgages is not a feature of the UK market in the way it is in Australia. Most mortgage remuneration is transactional, paid on completion. Recurring income for UK advisers generally comes from protection and general insurance business written alongside the mortgage, and from remortgage business at the end of a fixed term.

"Because UK mortgage income is transactional, the value of a client is realised again only at remortgage. Missing a product-transfer window is missing the revenue entirely."

Clawback

If a mortgage is repaid or redeemed shortly after completion — commonly within the first six to twelve months, depending on the lender — the lender can reclaim some or all of the procuration fee. Client-paid advice fees are usually not affected, but the terms depend on the individual firm's agreement.

Frequently asked questions

• Do mortgage brokers get commission? Yes — lenders pay a procuration fee on completion.
• How much commission does a mortgage broker make? Typically around 0.35%–0.45% of the loan for residential cases, often more for buy-to-let.
• Are mortgage brokers paid on commission only? Some are; others also charge a client advice fee.
• Are fee-free brokers worse? Not inherently — they are paid by the lender instead. Judge on whole-of-market access and disclosure.
• Are broker fees refundable? Depends on the firm; check whether the fee is charged on application or on offer.

What this means for advisers

With income concentrated at completion and no meaningful mortgage trail, retention is the whole game. The advisers who compound revenue are the ones who know exactly which clients come off a fixed rate in the next six months and reach them before an aggregator or the incumbent lender does. Kayotte monitors a settled book for exactly those triggers and produces a prioritised contact list.

Fee levels and clawback terms vary by lender, network and firm. Confirm current figures against your own agreements; this article is general information, not advice.