Fee-free mortage brokers

JulieWa

Simple question: Why are they free?

I am not yet in the position to start looking, just doing some research, so I don't want to contact them directly.

How do they make any money if they offer services for free?

edinburgher

They make a recommendation based on your requirements and are then rewarded by the mortgage lender for introducing you as a customer. There is no cost to you, but they are still paid.

We have used a fee free broker twice and they have got us a better mortgage deal than we were able to source ourselves after careful research on both occasions.

They may also try and tack on other, related services, home insurance introductions for example.

csgohan4

Fee free service doesn't mean the best service. They make money by volumes not quality.

Don't expect the same attention to detail, service and hand holding a competent paid broker does

dunstonh

Simple question: Why are they free?

They are not. They are paid a commission that is factored into the cost of your mortgage deal. However, it rarely makes a difference because mortgage brokers are a cheaper distribution than the bank branches.

Also, in some cases, a fee only broker can be cheaper than a fee-free broker.

JulieWa

Thanks for the responses, they are really helpful.

I want to wait til June/July until I apply for an AIP but I'm a first time buyer looking for a 5% mortgage so I'm not sure I will have much choice! Like I said, trying to read up as much as I can between now and then.