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Mortgage brokers get paid in one or two ways. Almost all earn a commission from the lender, called a procuration fee, paid when your mortgage completes and typically around 0.3% to 0.4% of the loan. On top of that, some brokers charge you a client fee and some do not. The borrower never pays the lender commission directly, and a regulated broker must recommend a suitable mortgage, not the one that pays them the most.
People are often a little suspicious about how brokers make their money, and honestly, that is fair. It is your biggest financial commitment, so you want to know who is paying whom. This is the plain-English version, including the bit most broker websites skate over: whether the way we are paid affects the advice you get.
I'm Max, founder of Bright Box and a mortgage and protection adviser, and I've arranged a lot of mortgages. Here is exactly how the money works.
The two ways a mortgage broker gets paid
There are only two sources of income for a mortgage broker, and a given broker might use one or both. (One quick aside: "broker" and "adviser" are just two words for the same role.)
- Lender commission (a procuration fee). The lender pays the broker when your mortgage completes. You do not pay this directly, and it does not change your rate.
- A client fee. Some brokers charge you a fee for their advice and work. Others do not charge you at all and rely solely on the lender commission.
That is the whole picture. Everything else is detail about timing and amounts. The single most useful thing you can do is ask any broker, up front, which of these two they use and how much. A good one will tell you without hesitating.
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Doug T. · Google reviewLender commission, explained
The commission a lender pays a broker has an old-fashioned name: a procuration fee, or "proc fee" in the trade. When your mortgage completes, the lender pays the broker a percentage of the loan as a thank-you for bringing them the business and doing the legwork.
For a standard residential mortgage it is usually around 0.3% to 0.4% of the loan amount, with about 0.35% a typical figure. To put real numbers on it, at 0.35%:
| Loan amount | Procuration fee at ~0.35% |
|---|---|
| £150,000 | around £525 |
| £250,000 | around £875 |
| £400,000 | around £1,400 |
The key point for you as a borrower: this money comes from the lender, not from you, and it does not add a penny to your rate. The rate you are quoted is the same whether a broker arranges it or you walk into the branch yourself.
A broker only earns the procuration fee if your mortgage actually completes. So it is squarely in their interest to recommend a deal you will be accepted for and will go through with, not just any deal.
The broker's own fee
On top of the lender commission, some brokers charge you a fee for their advice. There is no fixed industry rate, which is exactly why it pays to ask. In practice you will see three models:
- Fee-free. The broker takes only the lender commission and charges you nothing.
- Fee only on success. A client fee, but only once your mortgage is secured, so there is no risk to you if it falls through.
- Upfront fee. A charge taken early, sometimes on application, whether or not the mortgage completes.
Here is the bit people get wrong: a fee-free broker is not automatically the better deal. What you actually pay over the life of the mortgage is driven by the deal you end up on, not by whether a broker charged you a few hundred pounds at the start. A fee that secures a sharper rate, or simply gets a tricky case approved, can be the cheapest money in the whole transaction. Our companion piece on using a broker versus going to your bank digs into that trade-off.
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Does my broker just recommend whoever pays them the most?
This is the real question under all the others, so let me answer it straight rather than dodge it.
No, they should not, and a properly regulated broker is required not to. Mortgage advice is regulated by the Financial Conduct Authority, and the rule is simple: the recommendation has to be suitable for you. A broker who steered clients into worse deals to earn more would be breaking the rules they are licensed under.
There is a practical reason too. As you saw above, procuration fees are broadly similar across mainstream lenders, so there is rarely a meaningful pay difference to tempt anyone. The variation in what you pay over the term comes from the rate and fees of the mortgage itself, which dwarf any small gap in commission.
If you ever feel unsure, ask the question directly: "why this lender, and not a cheaper one?" A good broker will have a clear, specific answer about your circumstances.
That single question is the best protection you have, and any adviser worth using will welcome it.
How we get paid at Bright Box
In the spirit of an article like this, here is our own model with nothing hidden:
- We receive the lender's procuration fee when your mortgage completes, like every broker.
- We also charge a client fee, which varies with how complex your case is.
- We only charge that fee once your mortgage offer has been issued. Nothing upfront, and nothing at all if your case does not complete.
- If a better rate appears before you complete, we re-rate it for free.
- You become a client for life, so your future remortgages with us are free.
The reason we charge a fee at all is time: a properly researched, well-packaged application takes real work, and that work is what gets borderline cases approved and sharp rates secured. We would rather be upfront about charging for it than pretend advice is free and make the money back in ways you cannot see. For the full picture, see how much a mortgage broker costs and whether a broker fee is worth paying.
What to ask any broker before you start
You do not need to be an expert to keep a broker honest. Three questions cover it:
- How are you paid — lender commission, a fee from me, or both?
- When is your fee due — upfront, on application, or only once my mortgage completes?
- Why this lender for my situation, rather than a cheaper one?
If the answers are clear and specific, you are in good hands. If they are vague, that tells you something too.
One more check worth a minute: read the broker's reviews before you start. Honest feedback from past clients is the quickest gut-check on whether a broker actually delivers, which is exactly why we work hard for ours. You can see what Bright Box clients say on Trustpilot.
If you would like that conversation with no strings attached, get in touch with our team or read more about how we work.
Last updated: 18 June 2026. Procuration fee figures are typical industry ranges and vary by lender and product. This article is general information, not personal advice. Your home may be repossessed if you do not keep up repayments on your mortgage.
Frequently asked questions
Mortgage brokers are paid in one or two ways: a commission from the lender (called a procuration fee) once your mortgage completes, and sometimes a fee charged to you. Some brokers take only the lender commission, some charge only a client fee, and many do both. Always ask a broker how they are paid before you start.
Yes. When your mortgage completes, the lender pays the broker a procuration fee, typically around 0.3% to 0.4% of the loan amount. On a £200,000 mortgage that is roughly £600 to £800. The borrower does not pay this directly; it comes from the lender.
Some are, in the sense that they take only the lender's commission and charge you nothing. Others charge a client fee on top. A fee-free broker is not automatically better value, because the deal they place you on matters far more than whether they charged you a few hundred pounds.
They should not, and a regulated broker is required to recommend a mortgage that is suitable for you, not the one that pays them best. Procuration fees are also fairly similar across mainstream lenders, so there is little incentive to steer you. If in doubt, ask the broker to explain why a particular lender was chosen.
It depends on the broker. Some take payment on application, some on completion, and some not at all. At Bright Box we only charge once your mortgage offer has been issued, so there is nothing to pay upfront and nothing at all if your case does not complete.
