Do Mortgage Brokers Get Better Rates?

By Kristian Derrick

Last Reviewed: 15th February 2024

There’s no need to bang the drums or sound the horns for this one – it’s not really a surprise!

According to Statista, a 2022 survey found that around 70% of people in the UK used a broker when buying property.

And 91% of them rated it as a good experience. It’s not surprising when you consider that mortgage brokers can get better rates than the average person.

If that comes as a surprise to you, it’s time you find out more.

Life, as we know it, is fraught with choices, even when deciding how to find the best price and funding for a new home.

When you apply for a mortgage, you’ll either use a mortgage broker or try doing all the legwork yourself by going directly to the bank.

Before deciding which approach is right for you, you’ll need to understand how using a mortgage broker can save you time, money, and frustration.

Which is Better, Going Straight to the Bank or Using a Mortgage Broker?

A mortgage broker is a blessing for those who want to access a broad selection of products without approaching each mortgage provider.

Mortgage brokers have access to the entire market, and they’ll know just what to do if you’re working with a tricky application, such as having bad credit or being self-employed.

Using a mortgage broker is usually recommended if you’re the average Brit looking for a good deal and the least hassle and complexities. 

Now, on the other hand, if you’re a financial expert or have gone through the mortgage application process so many times that you could do it in your sleep, then approaching the bank, lender, or building society yourself is possibly worth your time. 

Navigating the course of a UK mortgage application alone can be challenging and stressful, but with a mortgage broker on your side, you can benefit in several ways.

Some of these ways include:

  • Mortgage brokers don’t just focus on one product. They have access to a wide range of products, which allows for comparison and real consideration.
  • Your credit report can be efficiently optimised and your application correctly prepared with the help of a mortgage broker.
  • A mortgage broker will have a broad overview of your financial situation and in-depth knowledge of your requirements, helping them to shop for the best deal and negotiate better rates for you.
  • You won’t find yourself scrambling for an unexpected document during the application process because your mortgage broker will furnish you with a comprehensive checklist of required documents prior to starting the process.
  • You’ll get access to a range of affordable insurance options to accompany your mortgage deal.
  • If you have an unusual situation or your application isn’t considered a “run of the mill,” a mortgage broker can provide specialist advice and guide you through every step. High risk, bad credit, and self-employed applicants can get assistance finding the right product for them with help from a mortgage provider.
  • Mortgage brokers can help you avoid tarnishing your credit record by applying for credit with the wrong mortgage providers and being rejected. The idea is to find the right lender for you as quickly as possible.

Overview: Pros and Cons of Applying for a UK Mortgage with the Bank Directly

There are, of course, some pros to going directly to the bank for your mortgage application:

  • In some instances, it can be quicker to finalise the process but there’s still the risk of higher interest rates as you’ll have no one to negotiate for you.
  • There are no broker fees.

Some cons of a mortgage application UK directly via the bank:

  • The bank won’t present a selection of products for you to compare and choose from. Instead, you will only have their set of products.
  • You’ll be presented with limited products and expected to make the decision yourself, unaided by someone with background knowledge of your financial situation. 

Overview: Pros and Cons of Applying for a Mortgage with a Mortgage Broker UK

With a mortgage broker, you can expect some pros and cons too. The pros are:

  • You’ll get access to the entire market.
  • The advice from a mortgage broker UK is unbiased as none of the products are “in-house.”
  • You’ll likely get helped by a highly qualified and experienced advisor who can provide you with specialist advice and guidance. 

Some cons of using a mortgage broker:

  • Buyers pay mortgage brokers fees, but these are usually minimal, and the trade-off is that you’ll most likely save quite a bit on interest.
  • Sometimes it takes a little longer to get the right deal set in place because you’ll review multiple products on the market to find the right one for you.

Do UK Mortgage Brokers Get Better Rates for Their Clients?

In most instances, professional mortgage brokers can arrange lower interest rates for their clients than if those same clients approached the mortgage provider themselves.

This isn’t because the lender is trying to pull the wool over your eyes but because a mortgage broker will access options from multiple lenders to compare instead of approaching just one or two lenders and getting access to a few limited products.

By considering your circumstances and financials, a mortgage broker can present you with all the deals you qualify for, and you’ll most likely discover more affordable options with professional help. 

What Are Broker-Exclusive Deals?

What a mortgage provider in the UK offers you when you apply for a mortgage and what your mortgage advisor may be able to negotiate for you could be worlds apart.

Some lenders will go as far as only dealing with brokers, meaning you cannot access their products directly but will need to go through a broker.

These are broker-exclusive deals usually made up of discounted and specialist offers.

Broker-exclusive deals and the help of a specialist mortgage broker are certainly ideal for borrowers who are considered high-risk.

Common high-risk borrowers who can benefit from broker-exclusive deals include:

  • Self-employed or non-formally employed individuals
  • Low income earners
  • Expatriates
  • Retired individuals

A mortgage broker can ensure that you present your application in the right way and have all the correct paperwork to prove affordability and apply for the amount you’re most likely to qualify for.

Using a mortgage broker in these scenarios could be the difference between getting the funding you need or being turned away or saddled with an exorbitant interest rate.

Are Mortgage Brokers Expensive?

One of the top concerns for home buyers is that they’re spending too much when purchasing property. Mortgage broker fees are at the top of the list when buyers want to cut back on costs.

But here’s the deal: mortgage broker fees aren’t always expensive.

Some charge a fee, but this may be negligible when you consider how much a mortgage broker can save you in the overall cost of your mortgage.

You’re most likely to find a better deal with a broker, and the overall savings will make the cost of the mortgage broker seem irrelevant. 

Going directly to the bank may seem like you’re saving money in the short term, but when you add the interest and the fact that you may be missing out on a better deal with another provider that the bank will never tell you about, do you stand to benefit?

Start a Relationship with Your UK Mortgage Broker Today

Mortgages in the UK last a lifetime. You can expect to pay off your property for some 20 to 30 years.

That’s a large chunk of your time, and you undoubtedly want to know that you’re getting yourself into a good deal now, as it’s a commitment you won’t easily get out of.

By teaming up with a UK mortgage broker, you can rest assured that you’re selecting from the best mortgage deals you qualify for and have someone on your side, fighting to get you the best financing possible for your money!

Call us today on 01925 906 210 or contact us to speak to one of our friendly advisors.

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