Borrower Charged 30% Consultation Fee by Broker
for Simple Mortgage Loan Referral

This is the first entry in an ongoing series looking at why Singapore's loan broker system needs fixing — not by singling out bad actors, but by showing, case by case, how borrowers end up exposed when there's little transparency around what brokers can charge or promise. This case is from July this year, and it's stuck with me since it was one of my earliest client calls.

The Setup

The client's situation was already precarious. He held a property — fully paid for in cash by his father — that had been put in his name. He wasn't trying to buy a home or refinance for a better rate; he was trying to raise funds against that property to cover business debts that had built up. That's already a stressful position to be in: using a family asset, held in your name but not really "yours" in the way most borrowers think of ownership, to bail out a business.

A Consultation Fee Worth Nearly a Third of the Loan

He'd gone to a broker for help structuring the loan. The loan itself was for $980,000. That broker's consultation fee: 30%.

Sit with that number for a second. Thirty percent of $980,000 is roughly $294,000. Nearly a third of the loan he was trying to raise would have gone straight to the person arranging it — before a single dollar reached his actual business debts. For context, consultation or brokerage fees in this space typically run in the low single digits — often 1% to 2%, occasionally more for complex or high-risk deals, but nowhere near 30%.

What This Reveals

There's no forged document here, no lie about the loan terms. The fee was disclosed. What this case reveals instead is a system with almost no guardrails around what a broker can charge. There's no standard requiring a consultation fee to be benchmarked against market norms before a borrower signs, and someone already under financial pressure — trying to save a business, using a family member's asset to do it — is rarely in a strong position to shop around or push back.

What to watch for: Consultation and brokerage fees are negotiable, and they should be benchmarked before you agree to anything. A fee that's an order of magnitude above market norm isn't a sign the broker is doing more work for you — it's a sign you're the easiest money in the room.

This wasn't the only broker this client dealt with. Read what happened next: Broken Promises That Led to Borrower Almost Losing His Once-Unencumbered Property →

Sebastian Lau

Founder & Principal Advisor, CraftWise

20 years in corporate banking and moneylending — credit risk, portfolio management, and business development. Read more →