Mortgage Broker or Bank for Your Mortgage?

If you’re applying for a mortgage, you would typically have two choices: go direct to a bank or building society to apply for the finance you need, or use a mortgage broker.

Here, we’ve compared both options to help you make the right decision.

Should I use a mortgage broker or go direct to a bank?

Use a mortgage broker if you want access to the entire market or have a more complicated financial situation which may require a specialist lender who doesn’t deal directly with the public. Use a bank if you already have experience of how the mortgage market works, a healthy deposit and are confident you can’t get a better deal elsewhere.

There are many reasons why people use a mortgage broker instead of going directly to a bank, building society or another type of lender, including…

• Brokers can give you access to a wider range of products
• They can save you valuable time by shopping around and negotiating more favourable deals on your behalf
• They can help you with the large amount of paperwork needed for a mortgage application
• They can offer bespoke advice and specialist expertise
• A broker could be the difference between mortgage approval and mortgage refusal if you fall into a ‘higher risk’ category such as bad credit or you’re looking for a self-employed mortgage.

The advisors we work with are whole-of-market, which means they have access to mortgage lenders across the UK and find the best rates and deals that you qualify for. Make an enquiry and we’ll introduce you to one of them for a free, no-obligation chat.

Do mortgage advisors get better rates for customers?

Yes, they can potentially get you more favourable interest rates than the ones you’d end up with if you went directly to a mortgage lender. This is because going straight to a lender without seeking professional advice first means you would only have access to their products only and risk missing out on a more suitable deal available elsewhere.

This is the main reason why you’re more likely to end up with a favourable interest rate if you apply through one of the advisors we work with. They have whole-of-market access so all of the best deals that you qualify for will be within reach if you decide to work with them.

Moreover, some mortgage advisors can negotiate a more favourable deal than you would otherwise get with a specific lender and may have access to broker-exclusive deals.

Remember, too, that there are some lenders out there that do not deal with the public directly and promote their products exclusively through brokers.

If you fall into a category that mortgage providers consider ‘higher risk’ such as bad credit, a self-employed mortgage, expat, retired or you’re looking for a mortgage with low income, a specialist broker can make all the difference in getting a mortgage with bad credit.

Many mortgage lenders either charge higher interest rates to customers in these categories or turn them away altogether, but a broker with the right expertise can match you with the provider who is best positioned to lend on the most favourable terms.

Is it cheaper using a broker or going direct to a bank?

The most important thing to keep in mind when considering this question is the overall amount you will pay for your mortgage if you apply through a broker. While most mortgage brokers will charge you fee to cover their time, you could save a significant amount in the long run if they find you a better mortgage deal than what you’d find yourself, and the likelihood is that they will.

On the flip side, those who go direct to a bank, building society or credit union might save a relatively small amount in fees in the short term, but they might be running the risk of being out of pocket overall since there’s no guarantee they’d end up with the best deal.

The brokers we work with operate on a success-only model. You won’t be charged a penny if they fail to get you a mortgage and will refund any upfront fees in this unlikely scenario.

What’s more, they won’t charge you for an initial consultation about your mortgage needs and personal circumstances and will offer total transparency on the fees involved.

Should I use a mortgage broker or do my own research online?

Most experts would recommend using a mortgage broker to compare the market rather than carrying out your own research online. Internet rates tables and comparison tools can be useful to get a general overview of the deals on offer, but they aren’t bespoke to you, are rarely whole-of-market and are known to promote sponsored products.

We only work with brokers who can compare deals across the whole of the market and source mortgages that are bespoke to your needs and circumstances.

Should I use a mortgage broker or an insurance agent?

Mortgage brokers can recommend and negotiate many of the protection insurance products you’re likely to need when buying a property, including life insurance, home insurance and landlord insurance (for those in the market for a buy-to-let mortgage).

Using a broker for protection insurance products has many of the same advantages as it would for mortgages, namely whole-of-market access and bespoke advice.

For information about types of insurance that fall outside of the protection class and access to financial advisors who specialise in them, see our sister service Online Money Advisor.

Do I need a mortgage broker or a financial advisor?

That depends on what you need advice on. If you need mortgage advice, the whole-of-market mortgage brokers we work with offer five-star service and can also arrange deals for related financial products such as bridging loans and protection insurance.

Independent financial advisors can give you advice on a wider range of products, which may include pensions, investments and business loans. Some of them are qualified to provide mortgage advice, as well as arrange deals for the aforementioned products.

We also work with independent financial advisors and will match you with one if that’s the best fit for your needs and circumstances. Make an enquiry to get started.