How Much Do Mortgage Brokers Cost?

In short, using a mortgage broker should cost you nothing. That’s one reason why they’re so much cheaper than going through banks.

Mortgage brokers’ fees vary from brokerage to brokerage, and they work in different ways, depending on the broker you use. Sometimes, the broker will find you the best mortgage package with a lender. The lender then charges you the monthly payments and upon approval, the monthly payments and most other pertinent details about the mortgage are between you and the actual lender. The lender then pays a commission, generally 0.5% to 2.5%, to the mortgage broker, for finding them the business.

In this case, you don’t actually pay the broker anything. You pay your mortgage to the lender, and the lender pays the broker commission. That being said, different mortgage brokers work with different lenders. So it’s still critically important that you research many different brokers to find the one that will get you the best deal on your mortgage.

Other times, a mortgage broker may charge you brokerage fees, either with or without charging commission to different lenders. This doesn’t always necessarily mean that these brokers can’t get you a deal on your mortgage that’s just as good, if not better, than a broker that works on a commission-only basis. It just means that their fees will vary quite a bit more, and you’ll have to do all of your research to make sure that the additional services they’re offering are worth the additional fees. For instance, some mortgage brokers might offer their own mortgage insurance, which can be a huge help to you if you don’t have enough for a 20% down payment. These brokers will very often have additional brokerage fees, because they offer more in their service.

Your mortgage is probably the biggest debt you’ll carry in your life, and it’s definitely no time to make a decision based solely on cost. Whether you find a broker that charges commission to the lender, or a broker that charges a fee to the customer, the most important thing is that you ultimately get the mortgage deal that’s going to work for you for the next 15 – 30 years.