Mortgage Broker- Higher Interest Rates

jamesthompson87

Hey,

Just got a DIP from NatWest through a fee-free whole of market broker.

My LTV is 68%.

The interest rate the mortgage broker quoted me was 3.94% with a application fee of £999 for a 2 year fixed mortgage.

However, I have just had a look on NatWest's website and they are offering 2 year fixed products for 70+% LTV at;

3.15% with £999 fee

3.49% with no fee

I feel a bit ripped off, as the reason I used a broker was to secure the best deal possible, yet this is not what they have done. Had I not have checked myself, I could have ended up paying an extra 0.79%.

Is it normal for a broker to offer such higher interest rates than if you went directly to NatWest?

Thanks

ACG

It can go either way.
Sometimes we get better rates, sometimes we get lower rates.

However, would you have checked natwest had you not gone to the broker?
Bare in mind a broker would also be doing the work for you so depending on the mortgage amount and how much extra the payments are - some people may be happy to pay and extra £5 a month for the 2 years (£120) for someone to do everything.

That was just a figure i picked out of my head, it might be more or less but it gives you an example.

Thrugelmir

Did you read the website small print?

Please remember that all figures are an indication only and are not a formal quotation or commitment to lend.

jamesthompson87

ACG wrote: »

It can go either way.
Sometimes we get better rates, sometimes we get lower rates.

However, would you have checked natwest had you not gone to the broker?
Bare in mind a broker would also be doing the work for you so depending on the mortgage amount and how much extra the payments are - some people may be happy to pay and extra £5 a month for the 2 years (£120) for someone to do everything.

That was just a figure i picked out of my head, it might be more or less but it gives you an example.

You raise a good point. When I discussed this with my friend his opinion was that I should apply directly to the bank and sack off the mortgage advisor. But I am reluctant to do this because I was having difficulty obtaining a mortgage, and as you say, I would not have know to apply to NatWest and advisor has does a fair amoun of work. I would feel uncomfortable esentially using the broker to work out who will lend to me then bypassing them, thus preventing them getting a fee.

An extra £5-£10 a month I would happily pay, but an extra £40 per month for 2 years seems excessive. It is a moral conundrum.

jamesthompson87

Thrugelmir wrote: »

Did you read the website small print?

Yeah I saw that but didn't think it would go from 3.15% to 3.94%.

My credit rating isn't the best and I had difficulties getting a mortgage, so I'm not sure if this would increase the interest rate??

ACG

Im not going to try and convince you one way or another, thats for you to decide. Personally, i think i would be mercenary and go direct...however i could be biased on that front as im confident i know what im doing.

It could be that the mortgage gets declined, if that were to then happen you may find your advisor turns round and says he would only find something else if you pay him a fee (i would).

If you are pushing the lending limits or have a less than perfect credit file, then i would be inclined to stick with him, but like i said its your decision at the end of the day. Hes not charging you a fee which i think puts him in the minority for mortgage advisors so your saving on that front.

I think ive sat on the fence enough on this post

Dave_Ham

I think this is an ongoing marketplace issue and needs clarity..

Firstly, credit rating has nothing to do with it. Natwest are a core lender and if you get through their criteria your broker is not a genuis, you would probably get through most credit scores aside maybe Nationwide or HSBC.

Clients have a difficult enough job, without making it harder. Your broker is fee free. Had he/she said to you that they were independent and for you to pay them £500 fee, would you be happy with that.

Potentially then, they could save you £40 a month on the Natwest deal (direct one) ? but could only support you through the process as was not able to go through them..

You seem reasonable and pragmatic and would probably take the best advice to advantage you the most..

Food for thought though...

jamesthompson87

Thanks for your input