If you’ve recently purchased a new property you might be wondering if you should, or even if you can give your mortgage broker a gift for all the help they provided throughout the process.
Yes, you can give your mortgage broker a gift. However, when deciding whether you should give your mortgage broker a gift, it’s worth considering how much they’ve earned from you during the process, also whether a gift would be the best way to actually thank them.
In this post, I’ll run through a variety of things that will be useful to know before you decide whether you should go out and buy the gift.
Can A Mortgage Broker Accept A Gift From A Borrower?
Yes, a mortgage broker can accept a gift from a borrower, however, it can only be of small value otherwise it could potentially be seen as a bribe, even if it isn’t. There may also be tax implications for the mortgage broker for receiving large additional benefits for performing their job.
Mortgage brokers have to abide by a code of ethics which includes rules and regulations around anti-bribery. If, for example, they were to accept an all-expenses-paid holiday around the Caribbean for completing your mortgage it could flag whether they were giving you a preferential service, possibly even at the detriment to their other clients, such as calling in favours to get lower rates.
This means if you do want to give your mortgage broker a gift, make sure to keep it of small value. I’ll run through some good gift ideas below, also if there’s anything better than a gift.
Should You Give Your Mortgage Broker A Gift?
Before you go out and buy a gift, it’s worth understanding how much money your mortgage broker will get from processing your mortgage application.
The commission is the main source of income that a mortgage broker gets which is paid by the mortgage lender. This is usually between 0.35% and 0.45% of the amount of money that is borrowed. So for example, if you were to borrow £300,000 at an average commission of 0.4%, your mortgage broker would get £1,200 in commission.
Your mortgage broker may charge you a direct fee as well with the average fee being around £500. However, if the reason why you’re looking to give them a gift is that they’re offering their services for free, remember they earn a significant amount of money through a commission.
They can also earn a lot of commission by offering you complimentary services such as life insurance and will writing services. I’ve written a post explaining in more detail exactly how mortgage brokers get paid if you would find that useful.
Now, all of that money definitely won’t go directly to the person you’ve been speaking to that’s actually been helping you with your mortgage, it will go to their company and they’ll only receive a small fraction. This is why buying a gift for your mortgage broker can still be a good idea and a nice thing to do.
What Is A Good Gift For Your Mortgage Broker?
There are many good gift ideas for your mortgage broker from chocolate to novelty gifts available on sites like Amazon and Etsy such as mugs, drink flasks and key rings. Below are some gift ideas that may help.
- Wine & beers
- Gift cards – shopping and meals out
- Notelty gifts with mortgage broker phrases on them
- drinks flasks
- key rings
- Thank you letter (not a gift but explained below)
The key is remembering to keep your budget low to avoid any potential bribery or tax concerns.
It’s also best to ask your mortgage broker directly before you buy any gifts. Their company may have rules in place that don’t allow mortgage advisors to accept gifts of any kind, so it’s best to ask otherwise you’ll effectively be buying the gift for yourself, which may not be the worst thing!
If they aren’t allowed to accept any gifts, that’s not a major problem as I think there’s something else that’s much better than a small gift, and that’s a thank you letter. I’ll explain why below.
How To Thank Your Mortgage Broker?
In my opinion, the best way to thank your mortgage broker is to send them a thank you note explaining exactly why they’ve made you a happy client as well as including a few key points.
Most mortgage brokers are just employees of a company. They have targets, bosses and promotion aspirations just like an employee of any other company. This is why sending them a thank you note can really help them in their career as your thank you note can be used as a positive reference of how they go above and beyond for their clients.
As you can only send them a gift of limited value, if you really want to show them your appreciation, writing a letter and sending it to their company can really help their career. Your letter may help them to secure a pay rise or promotion within their company which can be worth significant value to them personally.
For example, if your letter helped them secure a £2,000 annual pay rise and they worked for another 10 years, you’ve just helped them gain an extra £20,000 in value. I know that there are a lot of factors that will go into getting a pay rise, but your letter may be the influencing factor.
Writing a Thank You Note to Your Mortgage Broker
Now you may be wondering what you should write in the thank you letter, especially how to make it help their career. You don’t have to write a long letter, ideally the shorter and more concise the better as it’s more likely to be read by more people in their organisation.
It’s useful to include an example of how they went above and beyond, explaining exactly why you really appreciate the help they’ve given you during the mortgage process.
Then the key points to mention are how you will be recommending their business to friends and family (if you are of course, which I imagine you will do if you’ve received such good service). Also that you intend to be a long term customer due to the excellent service you have received from your mortgage broker.
Remortgaging and repeat business are a very large part of a mortgage broker’s business. Being able to retain clients for the long term as well as getting personal recommendations are critical to how your mortgage broker business operations. This is why if you highlight this in your letter it will receive an amazing amount of praise from their organisation and really help their career.
I’ve written an example below that may be useful.
Mortgage Broker Thank You Note Example Template
Here’s an example template you could use for your letter. You may want to go into more specifics and give examples of exactly where they went above and beyond.
Dear [Mortgage Broker Name],
Thank you so much for helping us through the mortgage process and making it a seamless experience.
You really took the time to help us understand all of our options and we’re really happy with the end result.
Thanks to your excellent service I will definitely be recommending [Mortgage Broker Company Name] to friends and family and plan to be a long term customer.
Looking forward to speaking again.
As you can see it’s quite short and concise which helps to ensure more people read it and the critical part of the thank you note is to highlight you’re going to recommend their services and be a long term customer.
You can send the letter over email either within a regular message, attach a PDF that you’ve created containing the letter or formally send it through the post. However, the email route is a lot easier and you’ll probably get a positive reply quite quickly.
If you’re still in favour of getting your mortgage broker a gift, you may even want to combine this letter with a small gift.
Overall, yes you can get your mortgage broker a gift, however, you are restricted on the value of that gift for bribery and tax implications. There are other options including sending your mortgage advisor a letter that may carry more weight and potentially provide even more value.
If you do have any questions about gifts, the best thing is to speak to your mortgage broker, I’m sure they’ll appreciate the call.
I hope this post has helped to give you a good overview of gifts for mortgage advisors and I’m glad you’ve had a good experience. One post I’ve written that may be useful now you’ve secured a mortgage is to understand how soon you can remortgage before your fixed-rate ends, so you can be ahead of the game and ensure you get the best interest rates on the next mortgage.
Hi, I’m John. I’ve always had a keen interest in Finance, so much so that I’ve made a career out of it! This site is a place where I can share everything I’ve learned as well as give me the excuse to research certain topics.
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