First-time buyers and younger borrowers are far more likely to pay for mortgage advice face percentage-based charges rather than older homeowners, research from L&C Mortgages reveals.
More than nine in 10 borrowers aged 18 to 34 said they paid a broker fee when arranging a mortgage, compared with 64% of those aged 45 to 54 and just 42% of borrowers over 55.
Younger borrowers are also more exposed to fees linked to loan size. Almost half paid a percentage-based charge, more than double the 21% recorded among 45 to 54-year-olds. Fewer than one in 10 borrowers over 55 reported paying a percentage fee.
Among 18 to 34-year-olds who paid a percentage charge, around two thirds were billed between 0.5% and 1% of the mortgage amount – potentially running into thousands of pounds on larger loans. Where flat fees applied, more than nine in 10 paid between £250 and £999.
HIGHER ADVICE BILLS
With most first-time buyers falling into the younger age bracket, the findings suggest those already grappling with deposits and higher living costs are also shouldering higher advice bills.
The research also flags pressure from estate agents. More than half of borrowers aged 18 to 34 said they felt steered towards an agent’s recommended or connected broker. That compares with just over a fifth of 45 to 54-year-olds and 12% of over-55s.
ADVICE IS CRUCIAL
David Hollingworth, Associate Director at L&C Mortgages, says: “Younger borrowers are far more likely to be hit with broker fees, and often the more expensive types of fees.
“Mortgage advice is crucial for those with less experience, but that advice doesn’t need to come with an unnecessary, additional cost.
“Many younger buyers are already struggling with deposits, moving costs and rising living expenses. Adding hundreds or even thousands of pounds in advice fees only eats into deposit savings and increases the long-term cost.
“The key message is that borrowers do have a choice. Just as good advice can help save money on your mortgage, using a fee-free broker can make a real difference at one of the most financially pressured moments of someone’s life.”
