Menu
Book a call

Home/Blog/Mortgages

Mortgages

Mortgage broker versus the bank: which should you use?

Going straight to your bank is the obvious move, and sometimes it is the right one. But a bank can only sell you its own mortgages, and it will not tell you when somebody else would lend you more or charge you less. Here is the honest comparison, including where a broker is not worth it.

5 min read

What your bank can and cannot do

A bank sells its own mortgages. That is not a criticism, it is the job. But it means the answer you get is the best product that one lender has, not the best product available to you.

It also means the affordability calculation you get is that one lender's. Lenders differ enormously in how much they will lend to the same person, particularly if you are self-employed, work shifts, earn commission or have any adverse credit. A decline from your own bank tells you what that bank thinks. It does not tell you what the market thinks.

The other limitation is criteria. Every lender has rules about the property, your income type, your deposit source and your credit history. Your bank checks you against its rules only.

What a broker actually adds

Two things, mostly. The first is range: we can approach lenders you cannot walk into, including ones that only accept business through intermediaries.

The second matters more and gets talked about less. It is knowing which lender will say yes before you apply. Every declined application leaves a footprint on your credit file, and several in a row make the next one harder. Matching your circumstances to a lender's criteria first is most of the value.

There is also the administrative side, which is unglamorous but real. Chasing the lender, the solicitor and the estate agent is a job, and it is the part people underestimate when a purchase starts to wobble.

Where the bank wins

Sometimes it genuinely does, and any broker who tells you otherwise is overselling.

If you are an employed applicant with a clean credit file, a decent deposit and a straightforward property, plenty of lenders will want you, and your own bank may well have a competitive product with a simple existing-customer process.

Some lenders also keep a small number of deals for direct customers only. They are not usually market-leading, but they exist, and a broker cannot access them.

And a bank will not charge you a broker fee. If your case is simple and your bank's rate is close to the best available, the fee may not buy you enough to justify it.

Where it goes wrong

The pattern we see most often is somebody who went to their bank, was offered less than they expected or declined outright, and concluded that they could not buy. In a good number of those cases another lender would have said yes on the same income.

The second pattern is the product transfer. When a fixed rate ends, your existing lender offers you a new one. It is quick and there is usually no valuation or legal work, which is genuinely convenient. It is just not automatically the cheapest, and almost nobody checks it against the wider market before accepting.

A fair way to decide

Ask your bank what it will offer. It costs nothing and it gives you a number to measure against.

Then have somebody check that number against the rest of the market, and be clear about what any advice will cost you before you proceed. If the bank's offer is close to the best available and your case is simple, take it. If it is not, you have found out cheaply.

What you should not do is treat one lender's answer as the market's answer. That is the mistake that costs the most, and it is the easiest one to avoid.

The short versionYour bank's answer is one lender's answer. Get it, then check it against the market before you commit. If the bank wins, we will tell you so.
Request assistance

Ask us about remortgage

This article is general. If you want it applied to your own situation, tell us where you are up to.

  • One of the five advisers on Eastfield Road, not a call centre.
  • Usually the same working day.
  • No obligation, and nothing to sign at the end of it.

Would rather talk now? Call 01733 602 033.

Please do not include medical or health details here. An adviser will go through those with you directly.

Want this applied to your situation?

Twenty minutes on the phone and you will know where you stand.