Price Is What You Pay, Value Is What You Receive | Monday Morning Musing #23

Broker fees. A topic that never disappears.

We talk about them often in the Merryoaks office, and I see the debate regularly surface on social media. Like many things in life, there are two camps:

The first camp includes brokers who only earn a fee if the deal completes. The lender pays them directly, usually as a slice of the arrangement fee, which is added to the loan. No upfront cost to the client.

The second camp, where Merryoaks proudly sits, includes brokers who charge a modest application fee and a broker fee, either on credit backed terms/mortgage offer or completion. These fees can be deducted from the loan on drawdown.

Merryoaks falls into the second camp and have chosen this path after considerable consideration from our inception. As with most decisions, there are pros and cons to both routes.

The no-fee model clearly reduces the initial cost to the client. In our industry, this model is usually associated with high volume, call centre style brokerages. These firms tend to process deals at scale, using handlers with limited experience who follow fixed checklists. For straightforward residential mortgages, this approach seems mostly acceptable if you consider yourself to be a ‘vanilla’ case. Most families move house and arrange finance only a few times in their lives, so a lower-cost option often wins out.

The high volume model reminds me of the large conveyancing outfits from my estate agency days. They are cheaper than a solicitor, yes, but also slower, more rigid, and often less effective when the transaction becomes complex.

Merryoaks operates differently. We work primarily in specialist finance, where deals are rarely simple. Our clients need more than just a processor. They need a partner.

That’s why we charge a small and fair application fee after we’ve completed the fact find, assessed the case, and identified a suitable lender. Your payment of the fee signals intent and your commitment to the process… it motivates us to deliver. It puts us on the hook, financially and personally, to make sure every document is handled carefully, every party is aligned, and no detail is overlooked.

The broker fee, typically collected upon offer or completion, plays a similar role. In complex cases, or where loans are small but time consuming, it helps maintain the level of care our clients deserve. After network fees, payment route costs, regulatory costs, PI insurance, and everything else that comes with running a business properly, the numbers aren’t always as glamorous as they appear. But we’re not here for glamour. We’re here for outcomes.

Cutting fees may seem attractive. But cutting service, communication, and accountability is a price too high for us. We believe in taking our time with clients. We believe in solving tricky problems. These things demand more effort, and that effort deserves fair recognition.

Once a fee is on account, we feel a deep responsibility to follow through. You’ve placed your trust in us, and we don’t take that lightly.

This model won’t suit everyone, and that’s okay. We’re here for the clients who recognise the experience, energy, and purpose we bring to every deal. We’re here for those who want something beyond basic processing. We’re here for those who care about people as much as pricing.

Remember, price is what you pay, value is what you get!

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