Best mortgage deals are no longer through brokers
I would always have advised anyone looking for a mortgage deal to go through a broker. They may have deals they want to push, and have fees to be paid (if not directly by you then certainly indirectly as it’s always the end user who ends up paying somehow) but these costs were always far outweighed by the benefits. Among these are the fact that many of the lowest mortgage rates where only available to dealers, not to retail customers. And when you factor in the time and hassle involved in your searching through hundreds of deals yourself (and the unlikelihood of your actually finding the best deal yourself, think needles and haystacks) then it simply made sense to use a broker. But a couple of things this week have confirmed that the best mortgage deals are no longer through brokers.
The Financial Services Authority (FSA) announced in late May that ‘the deals brokers can access are often significantly more expensive than those available direct from lenders’, and there are some good reasons for this. Firstly of course there is less money and fewer mortgage products on the market - so it’s not so hard for the banks to market their new product, and to make it stand out from an increasingly sparse crowd of competitors. Also, the banks and building societies are no longer climbing over each other to punt their products to the competition (in fact many institutions are positively discouraging us from taking out mortgages with them), so there’s not much point in paying a middle man to hook you in. In short, there aren’t enough mortgage funds to satisfy demand, so it’s a seller’s rather than buyer’s market (albeit a market the sellers dislike intensely).
The bottom line is that as the best mortgage deals are no longer through brokers, you should do your own research on a new mortgage, and it’s much easier to search the whole market with the paucity of products on offer. By all means consult your broker too, for a benchmark comparison. But don’t be at all surprised if he can’t meet your go-direct deal.
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But times change, and the Financial Services Authority
