The master broker will now charge a £245 fee on applications, with the valuation fee paid for by the customer. Freedom will keep the proc fee, leaving the intermediary to charge the customer directly for their services. Any additional cross sales on a case will sit with the intermediary.

Freedom said that, following an investigation by Mortgage Solutions into the unequal treatment of customers taking out secured loans, it will cease master broker fees from 1 January.

The investigation identified that, since the introduction of the Mortgage Credit Directive (MCD) in March, customers could be charged vastly different fees depending on their broker’s network membership.

Analysis by Mortgage Solutions showed that a borrower could pay between £2,250 and £5,825 for the same loan.

Alison Houghton-Corfield (pictured), head of relationships at Freedom for Intermediaries, said: “From 1 January 2017 Freedom for Intermediaries will be abolishing master broker fees on second charges.

“Many people will ask why and possibly wonder how we can sustain this. It’s the absolute right thing to do for the consumer and we want to be completely transparent in our offering and only charge the consumer for what is relevant to them, making for a fairer transaction.”

Freedom said there has been a shift in thinking on broker fees since the MCD was introduced. Under the new regulation, master brokers can follow processes adopted in the first charge world.

Given this, it said it has completely redesigned its fee structure based on feedback and industry insight.

“Early feedback from the intermediary community around this new structure is very positive and will help with quoting more second charges when consumers are looking to capital raise and not being deterred by large fees,” said Houghton-Corfield.

Earlier this year the Financial Conduct Authority flagged its concern with networks’ commercial relationships. Since then, networks have begun to reduce and cap fees on second charge lending.