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Value to be found from mortgage brokers

Value to be found from mortgage brokers

Category: Mortgages

Updated: 09/02/2010
First Published: 29/01/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Figures from Moneyfacts Group have revealed that mortgage advisers are increasingly offering better rates to consumers than can be found in branch.

Since the economic crisis took hold, lenders have opted to concentrate on branch based business in a move to control directly the volumes of new mortgage approvals.

This is reflected in figures that show that 58 per cent of product availability is branch based, more than double the 28 per cent seen in May 2008.

In the same period, the proportion of products available to brokers has fallen from 49 per cent to 23 per cent. By contrast, products available through brokers currently offer better value to potential homeowners.

The average rate for branch based business for a two year fixed rate mortgage is 4.86 per cent, compared worth 4.79 per cent through broker business.

With a five year fixed rate product, the average rate for branch based business is 6.05 per cent; the average rate for broker business is 5.97 per cent.

In the variable rate market, a two year product averages a rate of 3.73 per cent for branch business, compared with 3.69 per cent for broker business.

"Mortgage brokers have probably felt the impact of the banking crisis as badly as anybody," said Darren Cook, spokesperson for Moneyfacts Group.

"The proportion of the market that brokers have access to may have fallen, but it seems they are starting to compete evenly on price. Brokers have and always will form an integral part of a healthy mortgage market."

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