Is it worth using a mortgage broker?

What is a mortgage broker?

Let’s start by clearing up a common misconception. Most people use the terms advisor, broker, and mortgage expert interchangeably. It’s understandable—linguistically, these words are often associated with the same person. However, that’s not the case. It’s much like the difference between a solicitor and a barrister—they seem the same, but they are distinct roles.

We won’t get bogged down in regulations and definitions; let’s get straight to the point.

• An advisor charges you a fee for their service.
• A broker does not charge you any fee—and this is the person you are looking for.

What sets a broker apart?

A mortgage broker differs from a bank employee in that they are not limited to presenting offers from a single source. While some brokers work with a limited number of banks, the best ones have access to all of them, and they are the ones you should be working with. There is no reason to skip any offers—the best one for you might just be among them.

Furthermore, brokers focus exclusively on mortgage loans, so they stay up to date with all the latest changes and information. You won’t always find a dedicated specialist at every bank branch. In smaller branches, staff often have to handle everything—savings accounts, current accounts, credit cards, and so on. And someone who knows a little bit about everything is rarely an expert in one specific field.

You could, of course, rely on your own research and try to compare all the offers on the market yourself, but why would you? With over a dozen banks, each offering several loan variants, you would have to scrutinize the terms of nearly a hundred different offers. Imagine how long that would take.

A broker has the advantage of skill, experience, and access to the right tools. Not only will they compare all available offers faster than you could, but they will also point out current promotions or advise you to wait, knowing that a new offer is launching soon that might be the best fit for you.

Beyond that, they simply know which bank is the right one to apply to for your specific situation. Where will you have the highest borrowing capacity? Which bank currently has the fastest processing times, and which one might reject your application due to your specific type of income, even if their offer looks attractive? You won’t usually find this kind of information online, and if you do, it may well be outdated.

A good broker also helps negotiate loan terms and knows exactly what a given bank looks for. They will tell you what else you can do if there is a possibility of securing a better deal.

How much do mortgage broker services cost?

A mortgage broker earns a commission from the bank once a loan agreement is successfully concluded between you and the lender. The rate depends on their agreement with the bank, your loan amount, and any additional products, but it typically amounts to several thousand zlotys.

However, the specific broker comparing offers for you does not receive the entire amount. They have to share it with others along the way. They do not have access to all banks themselves and operate through agencies or intermediary firms. Banks do not want to sign contracts with tens of thousands of small entrepreneurs, so they work with a few large entities that act as a buffer.

Who pays the mortgage broker?

While you do not pay your broker directly, let’s not kid ourselves that the bank covers this fee. It is simply included in the total cost of your loan. So, if you compare offers with a broker and then take out a loan directly from a specific bank without one, you won't notice any difference. The only difference is that the commission will go to the bank employee who signed your contract rather than the broker who helped you find the offer. You will pay the same amount for the loan; the commission will just go to someone else.

Why do banks pay brokers at all? They have their own branches and employees, after all! Exactly, and maintaining all that infrastructure costs money regardless of whether a loan is granted or not. Every employee gets a salary, and you have to pay rent and bills for the premises. Brokers only receive commissions when a loan is disbursed. Even if they are unsuccessful, they don't represent a cost, and they have to cover their own expenses. The bank doesn't have to pay for anything unless it makes money itself. And that simply makes business sense.

Is it worth using a mortgage broker?

Since a broker earns a commission on every offer, it is clear they might be motivated by their own interests rather than your best outcome. How can you be sure they are honestly presenting you with the best offers?

First, you should receive a mortgage information form, which allows you to quickly compare different offers. You will find information there about the total amount to be repaid, interest, margins, and other parameters. All information about the loan itself is therefore transparent.

Second, the broker's commission is also transparent. In accordance with current regulations, the broker is required to inform you of the commission amount they will receive for each of the loans presented to you.

You may, of course, have doubts about whether the three standard offers presented are just the most lucrative options for the broker. However, there is nothing stopping you from asking for five, ten, or even all current offers.

If you are still worried that the broker is not presenting you with the best offers, you are not obligated to use them. You can go to another broker and compare loan summaries, or even go to a chosen bank and ask if they can offer you a better deal directly.

The entire relationship is based on trust. You want the best loan, and the broker wants a satisfied client who will recommend them to others, because they will earn significantly more from that than by cheating you out of a few hundred zlotys in commissions. Therefore, choose someone reliable with access to all offers. Remember, however, that while they can do all the heavy lifting of comparing offers for you, you now have the knowledge you need to verify their accuracy.