How are L&C doing it?

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Adamc
Adamc Posts: 440 Forumite
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edited 26 May 2018 at 10:20AM in Mortgages & endowments
I've been quoted an interest rate of 2.04% on a 2 year fixed 30 year mortgage. The lender is a high street bank.

The closest I can get is 2.29% direct with the same lender. All other lenders and the Mortgage Best Buy Tool on this site are all saying that 2.29% is the best rate available. All other factors are equal: No set-up fees. 80% LTV ratio. £500 cash back.

My question is: do L&C have access to exclusive rates that are available nowhere else? I'm slightly confused? And the difference in rates equates to around £500 per year savings in mortgage repayments.

Many thanks.
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  • ACG
    ACG Posts: 23,729 Forumite
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    A few lenders offer exclusive deals through brokers.
    Natwest have done it for a long time, Skipton announced a few exclusives on Thursday or Friday but there are also other lenders.

    Many lenders are wanting to get rid of their sales force (it means less on wages, pensions, admin, compliance, complaints etc) and for the sake of knocking a small percentage off, putting it through brokers in stead. Co-op being the prime example for this who have literally closed the door to new customers directly.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Generating new business is an expensive exercise. Outsourcing the role to a third party generates cost savings. In this case L&C provide the filter. Vetting applications and only passing through good quality business leads.
  • Adamc
    Adamc Posts: 440 Forumite
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    Once again L&C have found a deal with a rate 0.5% less than the broker (and personal friend) I went with 2 years ago. 
    The cost saving equates to £47 per month - over two years that would save more than £1000. Should I be weary of anything? 
  • haras_n0sirrah
    haras_n0sirrah Posts: 1,339 Forumite
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    how much is the mortgage?
    There are some at 1.41% with a 995 fee and 250 cashback
    first one with no fees is coming up at 1.79%
  • Adamc
    Adamc Posts: 440 Forumite
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    haras_n0sirrah said:
    how much is the mortgage?
    There are some at 1.41% with a 995 fee and 250 cashback
    first one with no fees is coming up at 1.79%
    160K. L&C offered 2 year fixed at 1.49 % (Broker said the best available was 1.99%). Neither have arrangement fees. 
  • dunstonh
    dunstonh Posts: 116,387 Forumite
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    My question is: do L&C have access to exclusive rates that are available nowhere else?
    All brokers do.
    More mortgages in the UK are arranged via mortgage brokers/advisers than by the banks themselves.   Indeed, most are arranged by your small local firms (who are usually members of mortgage clubs that give them access to deals).

    In periods when the banks do not have the capacity in branches they tend to offer better deals via brokers.  In periods the banks have the capacity in the branches, they tend to offer fewer or less valuable deals.  Currently, with banks focusing their staffing on CV support, broker only deals are likely to be more common.

    160K. L&C offered 2 year fixed at 1.49 % (Broker said the best available was 1.99%). Neither have arrangement fees. 

    Is the broker "proper" whole of market or a panel.   Whole of market doesn't necessarily mean that and the term can be used by large panels.  L&C are not the biggest. So, whilst they may get the odd L&C exclusive, other mortgage brokers would have as well via their club.    However, there are a number of mortgage clubs and some mortgage brokers may only be members of one and others may be members of multiple clubs.   So, not all brokers are the same.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Adamc
    Adamc Posts: 440 Forumite
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    dunstonh said:
    My question is: do L&C have access to exclusive rates that are available nowhere else?
    All brokers do.
    More mortgages in the UK are arranged via mortgage brokers/advisers than by the banks themselves.   Indeed, most are arranged by your small local firms (who are usually members of mortgage clubs that give them access to deals).

    In periods when the banks do not have the capacity in branches they tend to offer better deals via brokers.  In periods the banks have the capacity in the branches, they tend to offer fewer or less valuable deals.  Currently, with banks focusing their staffing on CV support, broker only deals are likely to be more common.

    160K. L&C offered 2 year fixed at 1.49 % (Broker said the best available was 1.99%). Neither have arrangement fees. 

    Is the broker "proper" whole of market or a panel.   Whole of market doesn't necessarily mean that and the term can be used by large panels.  L&C are not the biggest. So, whilst they may get the odd L&C exclusive, other mortgage brokers would have as well via their club.    However, there are a number of mortgage clubs and some mortgage brokers may only be members of one and others may be members of multiple clubs.   So, not all brokers are the same.

    Yes - whole of the market. If of any importance the cheapest rate they told me about was with my current lender.
    The cheapest L&C could find involved switching lender. 

  • haras_n0sirrah
    haras_n0sirrah Posts: 1,339 Forumite
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    if this is presumably a remortgage is there a reason your broker is recommending switching rate rather than changing lender? are you furlowed, self employed or other such reason that it may be difficult to switch?
  • haras_n0sirrah
    haras_n0sirrah Posts: 1,339 Forumite
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    on a remo the cheapest no fee fixed is coming up on my system at 1.69% so intrigued which lender this is Just out of interest really
  • Adamc
    Adamc Posts: 440 Forumite
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    haras_n0sirrah said:
    if this is presumably a remortgage is there a reason your broker is recommending switching rate rather than changing lender? are you furlowed, self employed or other such reason that it may be difficult to switch?


    No - I work within the NHS. 
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