Should I use a broker or go direct to a lender?

The short answer to this question is that there is no right or wrong answer – it doesn’t matter so long as you get the best deal, but will that come via a broker or going direct to lender?

Let’s compare services.

Using a mortgage adviser

Regulated mortgage advisers are required to hold an industry qualification, have a certain amount of experience and be approved by the FCA before they can trade. Many will also belong to voluntary professional organisations and / or mortgage clubs which provide them with a greater range of mortgage products they can offer.

Some positives to using a broker include:

  • Comparison of hundreds of mortgage products quickly and easily
  • A professional opinion on whether you meet the criteria for the product to avoid costly refused applications that can hurt your credit rating
  • Access to exclusive products or products not available on the high street
  • Advice on the best product for your particular circumstances *

* Note all mortgage brokers offer advice. A broker will make their service provision clear to you at the beginning of the process.

There are a lot of positives to using a broker, product comparison, advice and managing the process on your behalf being some of the strongest.

You should be aware that a broker may charge a fee for their service; this will be explained in detail at the beginning of the process. Most will only charge you if they arrange a mortgage on your behalf but some may charge you regardless. There will also be products that are either not available via a broker or that the broker doesn’t offer – a good broker should be aware of this and let you know. They may still get an introducer fee for sending you to the lender.

So long as a broker only charges you for arranging a mortgage and not the consultation beforehand there is probably nothing to be lost from talking to one, or a few.

Direct to lender

About 40% of the market chooses to go direct to a lender to get their mortgage.

If you’re remortgaging it’s certainly worth asking what your current lender can offer, you’ve already built up a history with them and they’re aware of your financial situation so a good deal may be more forthcoming, especially if they’d like to hold onto you.

But, even then the deal on the table may not be the best in the market.

A lender is of course only going to offer you their own products, so you won’t know if there is a better deal elsewhere. You can of course shop around yourself but with thousands of different mortgages on the market this can be time consuming, it can be worth the effort though –

Lenders don’t make all of their products available to brokers and some don’t make their products available to brokers at all.

So which one will offer the best deal?

As mentioned at the start it really depends on your personal circumstances, market and product knowledge and how willing you are to do the research yourself.

A broker in many instances can save a person a lot of time and possibly some money, direct to lender may save you on broker fees or may offer a product the broker can’t.

Our hand selected broker panel will only charge you if they arrange a mortgage for you. This means you can have them assess your circumstances and do a market comparison without it costing you anything.

If you’d like to know more you can make a no obligation enquiry here.

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