Almost £400m a year is spent on unnecessary ‘advice fees’ charged by a majority of mortgage brokers.
The research by One 77 Mortgages hit out at the ‘double-dipping’ rife currently in the mortgage industry which means an extra charge for advice levied on customers in 75% of purchases.
Many consumers reportedly do not realise these charges are non-essential and in many cases a broker will negotiate these or eliminate the charge altogether.
Alastair McKee, managing director at One 77 Mortgages, said: “It’s truly shocking that brokers are double dipping on fees in this way and stinging the consumer in the process.
“As ever, it’s a case of buyer beware but understandably, many less experienced buyers believe this is the norm across the board and that they have no choice but to pay.
“This is a costly misconception as that’s certainly not the case anymore. If you shop around, there are a range of firms out there who don’t charge fees above and beyond what they receive from the lender and that’s exactly the way it should be.”
But Andrew Montlake, director at Coreco, hit back at the claims and said: “I believe this is more to do with publicity seeking rather than having basis on the truth.
“In my opinion, this is a little disingenuous towards thousands of hard working brokers around the country who work hard to do the best for their clients.
“In any industry there are always differences in cost and as in any industry you often get what you pay for.
“There is room for both models and consumers will ultimately be the ones to decide whether a fair fee is worthwhile for the extra service a decent broker provides.”