Two pieces of research have been published today which apparently show that mortgage brokers no longer give access to the best deals.
According to Moneysupermarket, 90% of the cheapest mortgages currently available are only offered direct to consumers by lenders.
While HSBC, in their own research, found that 93% of the market’s lowest mortgage rates over the last two years were also only available directly, and not via a mortgage broker.
According to Which?, who have published this article on their website today, ‘’ Before the credit crunch, mortgage brokers sold up to 70% of all mortgages. During the property boom, the mortgage market was fiercely competitive, with brokers able to play lenders off against one another and obtain exclusive deals that would entice customers to borrow.
However, as a result of the financial crisis, most banks dramatically reduced the number of mortgages extended to customers and tightened up their lending criteria. Increasingly, mortgage brokers were frozen out of the lending process, with exclusive broker deals becoming less common and ‘direct’ mortgages dominating the best buy tables.’’
So does this mean it’s no longer worth consulting a mortgage broker?
It pays to be cynical when reading headlines such as this one whereby the company commissioning the research has an interest in the conclusions drawn. In this instance Moneysupermarket want you to spurn mortgage advisors and instead shop around using their website, while HSBC want to cut out the middle man and increase their profits.
In addition, both bits of research were based on relatively small samples, 96 mortgage deals in the case of the HSBC research. While Moneysupermarket only concentrated on two and three year fixed-rate mortgages, as well as two-year tracker deals.
Using price comparison sites or shopping directly certainly have their place, but this is assuming that you a) know what type of mortgage best suits your circumstances and b) you understand the small print of each product.
Mortgage brokers may not always have access to the best rates but what they can do is offer you advice and impartiality. A little knowledge can be a dangerous thing and trying to go it alone could see you end up with an inappropriate mortgage which you will end up regretting.
So it’s a case of horses for courses.