Younger borrowers are more likely to pay mortgage advice costs, with costs ranging from €250 to €999, new research shows.
Analysis from mortgage broker L&C Mortgages shows that 90% of 18 to 34-year-olds had to pay a broker’s fee when using an intermediary to arrange their home finance, while 42% of over-55s paid a fee.
This is partly because younger borrowers were “much more likely” to experience percentage-based fees, but also because they felt more pressure to use a broker recommended by their broker.
Nearly half of people in the 18 to 34 age group surveyed in the survey paid a percentage fee basis – which is more than double those in the 45 to 54 age group.
Two-thirds of younger borrowers who were charged a percentage fee paid between 0.5% and 1% of the mortgage amount
While there was a fixed amount, 96% of 18 to 34 year olds paid between £250 and £999.
With the majority of first-time buyers falling into this younger age bracket, the findings suggest that those getting onto the property ladder may be more vulnerable to paying more for mortgage advice than older, more experienced borrowers, L&C said.
This age group was also more likely to succumb to pressure from brokers squeezing their recommended or affiliated brokers. As many as 53% of younger borrowers took advantage of it, compared to 22% of 45 to 54-year-olds and 12% of those over 55.
David Hollingworth, associate director at L&C Mortgages, said: “Younger borrowers are much more likely to be hit by broker fees, and often the more expensive types of fees. Mortgage advice is crucial for those with less experience, but that advice doesn’t have to come at an unnecessary, additional cost.
“Many younger buyers are already struggling with deposits, moving costs and rising living costs. Adding hundreds or even thousands of pounds in consultancy fees only dents savings and increases costs in the long run.
“The key message is that borrowers have a choice. Just as good advice can help you save money on your mortgage, using a no-fee broker can make a real difference at one of the most financially stressed times in someone’s life.”