All the best rates on comparison tool are via a broker

Litts

We have perfect credit ratings with no missing payments and have a 46% LTV. There's a £100 difference from available rates (we only have £104k left on the mortgage) and the ones only available through brokers.

It seems really unfair that they are putting a barrier/additional cost for people who would go direct.

What is the reason for this?

Is there any way of circumventing this requirement?

Have you managed to get a the same rate from a lender by negotiating?

Neilos9

use a free free broker......

Litts

Neilos9 said:

use a free free broker......

Excuse my naivety but they exist?

Neilos9

sure they do.

dunstonh

It seems really unfair that they are putting a barrier/additional cost for people who would go direct.

No they are not putting a barrier up.   They are offering improved terms to a distribution channel that is lower cost than their own staff or direct applications.   The cheapest distribution channel for lenders is via mortgage brokers.     Brokers get all the details, package it up as the lender wants it and carry the liability for the advice given.   If it was done directly, the lender would have to do those things and carry the liability.

ACG

I have worked for 2 banks...
I had ongoing training,
my wages,
my pension,
discounted lunches (although they were terrible),
my chair, desk, computer, software,
my holidays,
my sick pay,
my stationary,
Insurance (office, professional and whatever else)...

For a mortgage, you need to pay that once for the adviser and once for the underwriter and possibly once for an administrator maybe ever twice. And then managers for those people and managers for the managers. 

Or you can just give a broker 0.3-0.4% of the mortgage amount.

K_S

Litts said:

We have perfect credit ratings with no missing payments and have a 46% LTV. There's a £100 difference from available rates (we only have £104k left on the mortgage) and the ones only available through brokers.

It seems really unfair that they are putting a barrier/additional cost for people who would go direct.

What is the reason for this?

Is there any way of circumventing this requirement?

Have you managed to get a the same rate from a lender by negotiating?

@litts Plenty of fee free brokers listed on the MSE guidance here

https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3

Litts

dunstonh said:

It seems really unfair that they are putting a barrier/additional cost for people who would go direct.

No they are not putting a barrier up.   They are offering improved terms to a distribution channel that is lower cost than their own staff or direct applications.   The cheapest distribution channel for lenders is via mortgage brokers.     Brokers get all the details, package it up as the lender wants it and carry the liability for the advice given.   If it was done directly, the lender would have to do those things and carry the liability.

Maybe I worded it incorrectly but my point was more that, when I remortgaged last time, all rates on the tool were bank rates only. Is that a recent change to include broker rates or just because rates were so low previously there wasn't much point.

dunstonh

Litts said:

dunstonh said:

It seems really unfair that they are putting a barrier/additional cost for people who would go direct.

No they are not putting a barrier up.   They are offering improved terms to a distribution channel that is lower cost than their own staff or direct applications.   The cheapest distribution channel for lenders is via mortgage brokers.     Brokers get all the details, package it up as the lender wants it and carry the liability for the advice given.   If it was done directly, the lender would have to do those things and carry the liability.

Maybe I worded it incorrectly but my point was more that, when I remortgaged last time, all rates on the tool were bank rates only. Is that a recent change to include broker rates or just because rates were so low previously there wasn't much point.

Maybe the lender is trying to encourage people to use brokers as they don't have internal capacity.

Historically, if lenders found their own distribution (e.g. branches or direct sales force) was at capacity but not the underwriting/processing side was not, they would improve the deals available via brokers.   If their own distribution was not at capacity, they would equalise the deals or have branch-specific deals.

This could also be due to the FCAs consumer duty guidelines.   The lender is transparent by saying they have deals that may be better via a different distribution.

london21

The free broker get their commision from the lender.