Going directly vs using mortgage advisor

g000444555

I am a first-time home buyer and my current 2-year fixed rate deal ends at the end of May 2022.

My current loan is with Halifax and I have contacted Halifax directly to provide an illustration.

I also contacted 3 independent mortgage advising services (brokers).

Halifax gives me 2.22% for a 5 year fixed rate, which I find terrible. Only advantage with going directly with Halifax is that there will be no product fee. While going through the mortgage advisor, usually imposes a fee of about £1000.

The other three mortgage advisors provide more competitive deals, even when suggesting Halifax as a lender.

It so happens that two of them also suggest Halifax 5 year fixed rate, but both give a different rate (1.73% and 1.59%).

I understand that given the current situation rates have changed rapidly, but the difference still seems quite substantial.

Inevitably, I have a few questions:

- How can a third-party independent mortgage advisor provide better rate for Halifax than going directly with Halifax? Would this make sense or would there be a catch to look for?

- How can two mortgage advisors provide different rates for the same 5 year fixed rate and the same lender? Is there a typical catch to look for? Or should I simply select the one with the better rate?

- 2 year fixed rates seem to have been increased considerably after the invasion of Ukraine but 5 year fixed rates not so much. Should I go for a 2 years fixed rate or 5 years fixed rate? Assuming I am not going to sell or do anything related in the next 5+ years. What would make the most sense from financial stand point?

Snookie12cat

1. Brokers can sometimes get exclusive deals.
2. They cant get different rates - did you ask them and they came back to you on the same day? If not, then the rates might have changed in between.
3. All rates are going up, but yes the 2yrs seem the most volatile at the moment. That is up to you really 2 or 5. Depends on your situation and your attitude to risk as 2yrs are lower than 5yr even now, but if its only marginal 5yr might be better,

I tend to stay with the same lender if there isnt much in it as it just less hassle all around. Do not forget your completion fee with Halifax when you leave.

ACG

2. Some brokers will have access to better deals, but it could be that one product has a fee and the other does not. The difference could be marginal. One broker might be recommending the cheapest deal, the other might be doing the cheapest rate. Neither is wrong, it is about what you prefer and what you discussed with the broker. 

3. Speak to the broker you use. If you do it direct you need to make that decision. 

kingstreet

If you are a Halifax existing borrower the only way a broker can access product transfer rates available to you is by entering the Halifax system with your account/roll number.

Have you provided that?

[Deleted User]

Snookie12cat said:

1. Brokers can sometimes get exclusive deals.
2. They cant get different rates - did you ask them and they came back to you on the same day? If not, then the rates might have changed in between.
3. All rates are going up, but yes the 2yrs seem the most volatile at the moment. That is up to you really 2 or 5. Depends on your situation and your attitude to risk as 2yrs are lower than 5yr even now, but if its only marginal 5yr might be better,

I tend to stay with the same lender if there isnt much in it as it just less hassle all around. Do not forget your completion fee with Halifax when you leave.

1. True
2. Partially true as brokers can get exclusive deals that other brokers cant get.  For instance at the moment I have an exlcusive with Halifax for remortgages that the other 3 brokers on the same road don't have

I am not aware of any exclusives in the product transfer arena though.  The only difference previously is that we had 2,3, and 5 year deals and direct only had the 3 and 5. The rates and fees were the same though afaik

amnblog

- How can a third-party independent mortgage advisor provide better rate for Halifax than going directly with Halifax? Would this make sense or would there be a catch to look for?

Halifax do not offer all their available rates directly to mortgage holders, all Halifax existing customer rates are only available via Brokers (this is because the lender does not want to be offering 'advice' at same the level as a broker due to regulation issues)

- How can two mortgage advisors provide different rates for the same 5 year fixed rate and the same lender? Is there a typical catch to look for? Or should I simply select the one with the better rate?

They cannot - but Halifax rates have moved several times in the last 4 weeks and they made have provided incorrect information. Since Halifax offer different rates at different balance levels and different loan to value it is easy to get the offer wrong if the broker has not checked into you actual account (see note earlier in the thread)

- 2 year fixed rates seem to have been increased considerably after the invasion of Ukraine but 5 year fixed rates not so much. Should I go for a 2 years fixed rate or 5 years fixed rate? Assuming I am not going to sell or do anything related in the next 5+ years. What would make the most sense from financial stand point?

The 5 year rates have been slower than the 2 year rates to rise. Finding out what would make sense from a financial standpoint is a question for a Broker not for the Lender.

An additional point: It makes sense to secure a new rate now as they are unlikely to be doing anything but continuing to rise. If your new rate is lower than currently you can start it for 1st April, making an additional saving.

getmore4less

Halifax are not the greatest lender out there.
Once they get you 

They tier the product transfer rates so as your mortgage gets smaller your rate goes up.
They hide their product transfer rates so are not transparent.