How to choose a reputable loan broker

Why the right broker choice matters now

The UK lending landscape is shifting. In 2025, the Financial Conduct Authority tightened mortgage broker rules to simplify responsible lending and sharpen accountability under the Consumer Duty. In practice, that means a good broker must evidence why their recommendation fits your budget, your goals and your tolerance for risk. For borrowers, it should translate into clearer conversations, fewer surprises and better long‑term outcomes. Choosing the right broker is not just a convenience. It is a risk control.

Understanding APR is not just about percentages - it is about what you will pay in real terms over time. The same logic applies to choosing a broker. You are buying advice quality, regulatory protection and market access. A reputable broker helps you pass stricter affordability checks, sets realistic expectations on rates and fees, and steers you away from unsuitable products. An unreliable one can add cost, delay and stress.

Under the Consumer Duty, brokers must act in your best interests, explain trade‑offs in plain English, and document how their advice meets your needs. That extends to transparency around fees and commission. You should see an upfront fee schedule and a clear scope of service before you sign. If you do not, consider it a warning sign. Only FCA‑authorised firms can advise on regulated mortgages. The FCA’s public register exists so you can verify a firm’s status in minutes.

A strong broker builds outcomes, not hype. They use lender knowledge to target applications strategically, especially if your income is variable, you are self‑employed, or your credit history is complex. They know which lenders have flexible criteria and how stress tests work when rates rise. For first‑time buyers, they can also navigate the 2025 Mortgage Guarantee Scheme, improving access with smaller deposits through participating lenders.

A reputable broker should leave you clearer, not more confused.

If you are weighing options across personal loans, car finance or regulated mortgages, the selection principles are similar: regulation, transparency, expertise, and fit for purpose. Kandoo is a UK‑based retail finance broker, and like all reputable firms in this market, it must meet FCA standards when dealing with regulated products. Your task is to check who is authorised for what, understand the service you are buying, and ensure the advice is tailored to you.

Who benefits from careful broker selection

If you are a first‑time buyer navigating the Mortgage Guarantee Scheme, the right broker can widen your lender pool and improve your approval odds with a realistic deposit. If you are remortgaging under tighter affordability rules, a broker can help you pass stress tests and compare product transfers with new‑lender deals. Self‑employed borrowers, contractors and those with fluctuating income benefit from guidance on acceptable evidence and lender preferences.

Borrowers with past credit issues need brokers adept at matching risk profiles to specialist lenders while keeping costs contained. Even if your case is straightforward, a broker should save you time by filtering options, explaining product jargon and laying out total cost over the full term. In short, anyone who values clarity, compliance and efficiency stands to gain from choosing a reputable broker.

Terms to know before you compare

• FCA authorisation - Required for advice on regulated mortgages. Check the FCA register.

• Consumer Duty - Rule set requiring brokers to act in clients’ best interests.

• Affordability assessment - Lender checks of income, outgoings and stress tests.

• Stress rate - Hypothetical higher interest rate used to test repayment resilience.

• Regulated vs unregulated - Owner‑occupier mortgages are regulated; some loans are not.

• Initial rate vs APRC - Teaser rate versus the cost averaged across the term.

• Product fee - A lender fee that may be added to, or paid outside, the loan.

• Broker fee - What you pay the broker for advice or arrangement services.

• Commission - Payment a lender may make to a broker. Must be disclosed.

• Loan‑to‑value (LTV) - Mortgage size divided by property value, expressed as a percentage.

Your short list of broker choices

1. Fully independent whole‑of‑market mortgage broker

   • Broad lender access, useful for complex cases or best‑rate hunting.

   • Check FCA authorisation, Consumer Duty compliance and transparent fees.

2. Specialist broker for complex income or credit

   • Focus on self‑employed, contractors, adverse credit or non‑standard property.

   • Expect deeper underwriting guidance and tailored lender shortlists.

3. First‑time buyer‑focused broker

   • Expertise in 95 percent LTV options and the Mortgage Guarantee Scheme.

   • Strong at budgeting, documentation and deposit strategies.

4. Digital broker platform

   • Quick comparisons and online tracking, often with lower fees.

   • Ensure real advisers are available and advice is truly regulated.

5. In‑branch lender adviser

   • Direct access to one lender’s products with no broker fee.

   • Limited choice; consider a broker comparison before committing.

Choice is useful only if it is well explained. Ask for a written recommendation that shows cost over time and why it suits your needs.

What it could cost and why it matters

Who is likely to qualify and on what basis

Eligibility depends on product type and lender criteria, but the fundamentals are consistent. Lenders assess income stability, documented via payslips, CIS statements or accounts for the self‑employed, alongside regular outgoings and credit conduct. In 2025, affordability tests include stress rates to ensure you can cope if interest rates rise. A good broker will review bank statements for patterns that might undermine your case and help you tidy finances in advance, such as reducing overdraft reliance or clarifying variable income. For first‑time buyers, the Mortgage Guarantee Scheme may allow smaller deposits through participating lenders, but you must still meet affordability and property criteria. Always verify that the adviser handling a regulated mortgage is FCA‑authorised and that you receive clear disclosures about fees and commission in writing before proceeding.

From search to offer in clear steps

1. Verify FCA authorisation on the public register.

2. Share goals, budget and credit history upfront.

3. Provide documents: ID, income, bank statements, commitments.

4. Broker assesses affordability and lender criteria fit.

5. Receive written recommendation with costs and rationale.

6. Agree fee schedule and scope of service in writing.

7. Submit application and respond quickly to underwriter queries.

8. Review offer terms, fees and conditions before acceptance.

Advantages and trade‑offs at a glance

Red flags and checkpoints before you commit

Before you sign terms, request a written fee schedule that separates broker fees, lender product fees and any commission arrangements. Ask the broker to explain how their recommendation suits your budget under higher rates and show total cost over the fixed term and overall term. Check their FCA status and permissions, along with recent reviews on trusted platforms. If the broker cannot clearly explain the difference between regulated and unregulated products, or refuses to document their advice under Consumer Duty, walk away. Clarity, disclosure and suitability are not optional extras in 2025.

Alternatives if a broker is not right today

1. Apply directly with your existing lender for a product transfer.

2. Use a fee‑free digital comparison for an initial market scan.

3. Consult a specialist debt adviser if affordability is strained.

4. Build deposit or improve credit, then revisit in three months.

Common questions, clear answers

Q: How do I check a broker is legitimate? A: Use the FCA’s public register to confirm the firm and individual permissions. For regulated mortgages, advice must come from an FCA‑authorised adviser.

Q: What documents will I need for affordability checks? A: Typically photo ID, recent payslips or accounts, bank statements, proof of deposit and details of existing credit. Self‑employed borrowers should expect tax calculations and evidence of contracts.

Q: Are broker fees always worth paying? A: Often yes, if the broker improves approval chances or finds a lower total cost deal. Demand a fee breakdown and compare against savings over the term.

Q: What is the Consumer Duty and why should I care? A: It requires brokers to act in your best interests, provide clear information and evidence suitability. It reduces the risk of unsuitable advice or mis‑selling.

Q: Can brokers access government‑backed options for first‑time buyers? A: Yes. In 2025, participating lenders offer the Mortgage Guarantee Scheme. A knowledgeable broker will assess eligibility and manage expectations on deposit and affordability.

Q: What is the difference between regulated and unregulated mortgages? A: Regulated mortgages cover owner‑occupiers and include strong consumer protections. Unregulated lending may not. Your broker should explain protections and risks in writing.

Make your choice with confidence

Shortlist two or three FCA‑authorised brokers, request written fee schedules and example recommendations, and compare total costs over time. Ask how they will support you through underwriting and how they evidence suitability under Consumer Duty. The right partner should leave you fully informed and ready to proceed.

Important information

This guide is for general information only and is not personal advice. Always confirm FCA authorisation and seek tailored recommendations before committing to any credit agreement. Your home may be repossessed if you do not keep up repayments on your mortgage.