Young Homebuyers Are Paying the Most for Mortgage Advice

New research has revealed that younger borrowers are far more likely to pay for mortgage advice than older homeowners — and they often face the steepest charges.

A survey of 1,000 UK homeowners found that more than nine in ten borrowers aged 18 to 34 paid a fee to a mortgage broker for advice. By comparison, around two-thirds of those aged 45 to 54 said they paid, and fewer than half of over-55s did so.

The type of fee also varies sharply by age. Almost half of younger borrowers were charged a percentage of their mortgage amount rather than a flat fee — a structure that can make costs significantly more expensive for those borrowing larger amounts. Only around one in five people in their late 40s and early 50s paid a percentage fee, and fewer than one in ten over-55s did so.

For those charged a percentage fee, most younger borrowers paid between 0.5% and 1% of their loan amount. On a £250,000 mortgage, that translates to £1,250 to £2,500 in broker fees alone — a significant sum for anyone, but particularly for first-time buyers who are already stretching to cover deposits and moving costs.

Even when a flat fee was charged, the vast majority of 18-34 year olds said they paid somewhere between £250 and £999 for advice.

Given that most first-time buyers are aged under 35, this group faces a double hit: they have the least financial headroom but pay the most for professional advice. This is money that could otherwise go towards a deposit, reducing their loan-to-value ratio and securing a better mortgage rate.

The research also highlighted a concerning trend around estate agent referrals. More than half of 18-34 year old homeowners (53%) said they had felt encouraged or pressured by an estate agent to use a broker linked to the agency. That figure drops to around one in five (22%) among those aged 45-54, and to just 12% of over-55s.

While estate agent-linked brokers aren't necessarily bad, buyers should be aware that they aren't obligated to use them. Shopping around — or using a broker offering free initial advice — can save thousands of pounds.

The key takeaway for younger buyers is that you have a choice. Many excellent mortgage brokers offer free to use initial advice, earning their income from the lender instead of charging the borrower.

Just as good advice can help you find a better mortgage deal and save money over the term, using a broker offering free initial advice can make a real difference at one of the most financially pressured moments of your life.

At The Mortgage Genie, our qualified advisors provide free initial mortgage guidance. We compare deals across our comprehensive lender panel to find you a suitable deal — with any broker fee explained and agreed upfront before application.