Mortgages & finance

A mortgage broker costs between £300 and £1,000 if they charge a fee, or nothing at all if they are fee-free. Fee-free brokers earn via lender commission (around 0.3% to 0.5% of the loan); independent fee-only brokers charge £500 or more and take no commission. Some fee-charging brokers refund the fee if you complete through them - always confirm the fee, when it is payable, and whether it is refundable in writing before they run a credit check.

A tracker mortgage is a variable-rate deal that follows the Bank of England base rate at a set margin above it, for example base rate plus 1%. When the base rate changes, your lender changes your rate too, usually within a month, so your monthly payments go up or down in step. The margin above the base rate is fixed for the deal, and the deal typically runs for 2 to 5 years (sometimes lifetime). Trackers are often cheaper than fixed rates at the start and usually carry no early repayment charge.

There is no single borrowing figure, because each lender runs its own affordability assessment. As a rough illustration only, some lenders describe their limit as around 4 to 4.5 times your salary, so a £45,000 income could suggest borrowing up to about £202,500. Your actual offer depends on your outgoings, credit history, deposit size and the lender's stress test, so get an agreement in principle to see your real number.

Lenders differ in how they work out what you can borrow. Some describe their limit as an income multiple, but there is no standard multiple across the market. The actual offer depends on your committed outgoings, credit history and the lender’s own affordability stress test.

Neither is better outright; it depends on your budget and risk tolerance. A fixed rate is better if you need certainty and your budget cannot absorb a rate rise, for example if you are a first-time buyer on tight margins. A tracker is often better if you have flexibility to absorb rises, you expect to move or overpay heavily (trackers usually have no early repayment charge), or you think base rates will fall. As a rule of thumb, if the fixed rate is more than about 0.5% above a comparable tracker, the certainty is expensive and you should run the numbers before paying for it.

Affordability is not just about the maximum a lender will offer - it is about what you can comfortably repay each month alongside your other commitments. Lenders check your income against outgoings like loans, cards, childcare and regular spending, then stress-test whether you could still afford the mortgage if rates rose. Use the affordability calculator for an indicative figure, then confirm with an agreement in principle before committing to a price range.

Some mortgage brokers are genuinely free to the borrower - they are paid entirely by lender commission, usually 0.3% to 0.5% of the loan. Fee-free brokers still owe you the same duty of care under FCA regulation, and many whole-of-market brokers operate on this model. The catch is that commission can bias which lender they recommend, so ask whether commission varies by lender and whether they compare the whole market.

A mortgage in principle (AIP) is a lender’s written indication of how much they would lend you. It’s free, usually takes minutes online, doesn’t affect your credit score (it’s a soft search), and is essential for making offers - agents and sellers expect to see one.

You can usually afford a mortgage if your monthly repayments, plus an affordability stress-test buffer, fit comfortably within your take-home pay after committed outgoings. Lenders typically want total housing costs to stay well below your income, and they look at 3 to 6 months of bank statements to see your real spending pattern. Clearing expensive debt and building a bigger deposit are the quickest ways to make a mortgage more affordable.

A tracker sets your interest rate at a fixed margin above the Bank of England base rate, such as base rate plus 1%. Every time the Bank of England changes the base rate, your lender adjusts your rate to match, usually within a month, and your monthly payment changes with it. The margin above the base rate stays the same for the whole deal, so you always know how far above the base rate you sit - you just don’t know what the base rate will do. The deal runs for a set term (often 2 to 5 years) and most trackers have no early repayment charge, so you can overpay or switch without a penalty.

Not always. Brokers split into three models: fee-free (you pay nothing, they take lender commission), fee-charging (£300 to £1,000, sometimes plus commission), and independent fee-only (£500 or more with no commission). A fee does not guarantee better advice - a fee-free whole-of-market broker can outperform a fee-charging restricted one. Get the fee, when it is payable, and whether it is refundable in writing before they run a credit check.

As a rough starting point only, some lenders describe their limit as an income multiple of around 4 to 4.5 times your gross salary, so a £60,000 income could suggest borrowing up to about £270,000. Joint applicants are usually assessed on combined income, which can lift the multiple. Remember the multiple is only an illustration - your actual offer is set by the lender's affordability checks on outgoings, credit and deposit, so use a mortgage in principle to get your personalised figure.

Mortgage brokers get paid in one of three ways: lender commission (typically 0.3% to 0.5% of the loan, paid by the lender), a client fee (£300 to £1,000 paid by you), or a combination of both. Independent fee-only brokers take no commission at all, which removes the bias toward higher-commission lenders. Fee-free brokers rely entirely on commission, so always ask how they are paid and whether commission varies by lender.

Start by deciding whether you need a whole-of-market broker (who can access most lenders) or are happy with a restricted panel. Check the FCA register to confirm they are regulated, ask how they are paid, and get the fee structure in writing. MoneyHelper lists regulated brokers and comparison tools can pre-filter by fee model. For unusual cases - self-employed, a credit blip, a large loan, or a complex income - a specialist broker is usually worth the fee.