The job in plain terms
The work divides into three parts. First, lender selection: reading the case, income, property type, company structure, credit history, and mapping it against the criteria of the lenders in the market, including specialist lenders that do not deal with the public directly. Second, packaging: assembling accounts, bank statements, tenancy schedules and explanations so the underwriter's questions are answered before they are asked. Third, case management: chasing valuations, responding to underwriter queries and keeping solicitors moving until completion. Most of what determines how long a case takes happens in that third part, and we set out the typical stages in our guide to how long a buy to let application takes.
Access, not magic
Brokers do not get products that beat the whole market on every case, and any broker claiming otherwise is overselling. What a broker has is coverage. A single lender can only offer its own products. A whole of market broker can place a case with a high street bank, a specialist buy to let lender or a bridging lender depending on what fits. Some lenders, particularly specialists in limited company, HMO and semi commercial lending, only accept applications through intermediaries, so part of the market is simply not visible to a borrower going direct.
A worked example of what the difference costs
Take a £180,000 interest only buy to let loan. A landlord going direct to their own bank is offered 5.49%, for illustration. The interest is £180,000 x 5.49%, which is £9,882 a year, £823.50 a month. A broker places the same case with a lender whose criteria fit it at 4.99%. The interest is £180,000 x 4.99%, which is £8,982 a year, £748.50 a month. The difference is £75 a month, £900 a year, £4,500 over a five year fixed period. Against that sits a typical broker fee, £495 in our case, payable on offer. Where the rate outcome is identical, the fee buys packaging and case management rather than a saving, which is why we are direct about when a case is simple enough to place anywhere. You can test how rate changes move the numbers on our buy to let affordability calculator.
How brokers are paid
Two ways, and a reasonable broker is transparent about both. Lenders pay a procuration fee to the broker on completion, typically around 0.4% to 0.5% of the loan on buy to let, roughly £720 to £900 on the £180,000 example. Most brokers also charge a client fee, commonly £300 to £1,000 on standard cases, sometimes a percentage on complex commercial cases. Both figures appear in the disclosure documents before any application is made, so the full cost is visible up front.
Where a broker changes the outcome
- Self employed income that does not fit a standard template, such as one year of accounts or income left in the company. The gap between lenders on these cases is measured in tens of thousands of pounds of borrowing, as our guide to mortgages with one year of accounts shows.
- Limited company purchases, where guarantees, SIC codes and structure questions decide which lenders will even look at the case.
- Unusual property: HMOs, flats above commercial premises, ex local authority blocks, short lease flats.
- Credit history with a story attached, where matching the case to a lender's specific adverse credit policy avoids declines that would sit on the record.
- Deadlines, such as auction purchases, where knowing which lenders are moving quickly that month matters.
Regulation and what it covers
Residential mortgage advice and consumer buy to let are regulated by the Financial Conduct Authority. Most investment buy to let and commercial lending is unregulated business, though brokers arranging it are still subject to FCA rules where they hold permissions. Aurapa Ltd is an Appointed Representative of Commercial Finance Network Corporation Ltd, FCA 796413. In practice the useful question for any broker is the same regulated or not: which lenders they can access, what they charge, and what happens to the fee if the case does not complete.
Related questions
How much does a commercial finance broker charge?
Typically a client fee of £300 to £1,000 on standard buy to let cases, sometimes a percentage on large or complex commercial cases. Brokers also receive a procuration fee from the lender on completion, typically around 0.4% to 0.5% of the loan. Both are disclosed before an application is made.
Can a broker get rates I cannot get myself?
Sometimes. Some specialist lenders only accept applications through intermediaries, so their products are not available direct. On mainstream cases the same product is often available both ways, and the broker's value is lender selection and packaging rather than a secret rate.
Is using a broker slower than going direct?
Usually the opposite on anything non standard. A case packaged to answer the underwriter's questions up front avoids the query cycles that add weeks. On a clean, simple case with a mainstream lender the difference is small.
What information does a broker need to start?
For a buy to let: the property details and expected rent, deposit and its source, income evidence, and details of any company structure. For self employed applicants, the last two years of accounts or tax calculations where available.
Is buy to let broking regulated by the FCA?
Most investment buy to let is unregulated lending, while consumer buy to let and residential mortgages are FCA regulated. Aurapa Ltd is an Appointed Representative of Commercial Finance Network Corporation Ltd, FCA 796413.
Talk it through with us
Every case is different. Call us, message us on WhatsApp, or send us the basics and one of our team will come back to you about working with a commercial finance broker, usually the same working day.