Public told to beware of using high street mortgage advisers

News Category: Industry News

Consumers have been urged to give high street mortgage advisers a berth after two different reports said that virtually all the best deals are to be had direct from lenders themselves.

Nine out of ten best-buy tracker mortgages on the market are available directly from lenders only, comparison website moneysupermarket has said.

A second report, from HSBC, found that of the 96 cheapest mortgage deals available over the past two years, there were only six occasions when brokers could beat the equivalent best deal.

HSBC said the biggest difference between broker offers and direct deals was in two-year trackers.

Martijn van der Jeijden, head of mortgages at HSBC, said: “Customers can no longer rely on brokers to get them the best deal.”

Kevin Mountford, head of banking at moneysupermarket, gave consumers similar advice.

He said the market had been turned upside down – and warned consumers to beware of using brokers.

In remarks bound to depress and infuriate brokers, he said: “Traditionally, mortgage brokers have had the pick of the best deals on the market, with lenders often offering them better deals than they were able to give to their customers direct.

“However, the financial turmoil in the last couple of years has seen the mortgage market turned on its head, and due to the lack of supply and high demand, lenders can take full advantage of the current situation rather than having to push their products through brokers, which they previously relied on.

“As a result, anyone using a mortgage broker needs to be aware that the range of products available may be limited.

“Our analysis of the currently best two and three year trackers on the market shows nine out of ten products are available direct from lenders only, highlighting that the days of brokers offering a ‘whole of market’ range of products to their customers are behind us.

“Consumers are growing increasingly savvy when it comes to their finances and have begun to understand how important it is to shop around for the best products.

“Whilst some people will always want advice from an intermediary, this should be seen as part of the shopping around process rather than the final word in mortgage products, as consumers who fail to shop around will no doubt miss out on the best deals available.”

But Andrew Montlake, director of broker firm Coreco, said: “If securing a mortgage was as simple as finding the cheapest deal, the lowest rates would take the lion’s share of all mortgage business.

“Applicants approach us with increasingly sophisticated requests.”

At the peak of the property boom in 2007, brokers were responsible for seven in ten mortgage deals and many agents went into financial services to set up 'one stop shops'.



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