Buy-to-Let Mortgage Brokers

You might see many Buy-to-Let mortgage brokers online offering advice without fees, but be careful to note this is now everyday practice throughout the industry. The advice – especially the initial consultation – is free, but nearly all brokers charge buy to let mortgage broker fees or commission for their services. However, how this is charged and who pays it can vary. Regulations introduced by the government in recent years obliges brokers to be transparent about their fees, and they may take a commission from the lender or a fee from the borrower, and sometimes both.

Buy-to-Let fees tend to be a little higher than conventional residential mortgages. The broker’s fee is often calculated according to a percentage of the total loan amount – typically around 1% – or some brokers might state a fixed fee for their service, which can vary from £500 to £1,000. In the case of a standard fixed fee, the broker will usually also take the commission from the lender; if their fee is solely based on a percentage paid by the borrower, then they will typically rebate the commission they received from the lender.

Some brokers may mention other fees that are in fact not theirs but charges from other professionals as part of the mortgage chain, which they might then pay on your behalf if you do not do so direct. This might include (but is not limited to) an application fee (which may be used to pay for the valuation survey), a booking fee (which is payable to the lender in order to secure a particular interest rate), transfer fees and legal fees for your solicitor to handle the paperwork and checks.

In the end, every professional who assists you in achieving the mortgage you need will require a fee for their services. Whether this is covered by the borrower, the provider, the broker or another advisor, the money will change hands, and any figure that looks like a saving is likely to be charged back to the customer in a more subtle way, perhaps in the form of a fractionally higher interest rate.

Remember, brokers are there to help you and are obliged to offer advice that is in your interests, not solely for them to make a profit.