81% of best buy deals offered direct, claims HSBC
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Direct mortgage lenders offered 81% of the deals in the best buy tables in the past year, according to HSBC.
It has based its findings on research carried out by Moneyfacts which looks at products offered across the four most popular mortgage categories: two-year fixed, five-year fixed, two-year discounts and lifetime trackers.
Over the last year HSBC says the lowest rate offered by direct lenders has been on average 0.14% points lower than the best rate offered through the intermediary channel.
It says for a typical £150,000 mortgage it equates to £210 per year in extra interest if the customer had selected the intermediary route rather than going direct to the mortgage provider.
For two-year discounts it claims the margin has been 0.25%, for lifetime trackers 0.19%, and for five year fixed 0.18%.
It says the two-year fixed category was the only one dominated by an intermediary provider and direct lenders provided 100% of best buys in two-year discount, lifetime tracker and five-year fixed mortgage categories.
In a pop at brokers, Peter Dockar, head of mortgages at HSBC, says: “The research shows that the recent trend for direct lenders to offer the lowest rates has continued in the past year. Mortgage customers used to rely on brokers for the best deals, but this is no longer the case.”
HSBC has never sold its mortgages via intermediaries and the bank believes it is best placed to sell its own mortgages, and that lender and borrower need to deal with each other during the sale process to make the best lending and borrowing decisions.
He claims HSBC accepts around 9 in 10 of all customers who apply for a mortgage with the bank.
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Readers' comments (28)
Anonymous | 18 Oct 2011 10:02 am
Another useless piece of information from the bank that used to like to say yes!
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Anonymous | 18 Oct 2011 10:06 am
think there must have been a typo on the last line. it should have read declined 9 in 10. why do HSBC bask in the fact that direct deals are cheaper, is this so to justify their policy. if direct deals are so much better and lenders were offering a great service you would think the number of mortgages arranged directly would be so much more higher
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Calvin Oram | 18 Oct 2011 10:08 am
"HSBC has never sold it's mortgage via intermediaries" - yes they have; First Direct mortgages could be arranged via some networks some years ago.
£210 extra over a year / 12 = £17.50 per month. If you want an HSBC mortgage, aren't you almost forced to pay for a "paid for" bank account. Aren't you also sold massively over priced inferior insurance with the whole processing of arranging a mortgage elongated as much as possible so if you don't arrange the insurance or bank account the bank has every opportunity to decline the mortgage at any point it decides. Nice when you are trying to buy a house!
Same old, same old PR from HSBC designed only to serve the interests of a greedy multinational.
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Tim Lynch | 18 Oct 2011 10:11 am
Yes Peter Dockar it is best that lender and borrower have a direct relationship as it means the lender can sell the borrower vastly over priced protection and GI policies on the strength of providing the mortgage.
Unfortunately I still have to refer the odd client to HSBC and other direct lenders, but Peter and his peers should take note that not once have any of their advisers achieved a cross sale, and that in each case the relationship will remain with me and always will!!!
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David Sheppard, Perception Finance | 18 Oct 2011 10:12 am
So Peter Dockar is seemingly implying that people do not need the services of a broker by the looks of this. I beg to differ.
There may well be people who can and will fit with most lenders criteria but everyday the broker community speaks to many people who require their knowledge and ability to find a lender that will accommodate any variety of additional needs.
I think I can speak for both brokers and clients in saying that dealing with banks is not always easy either. This is not just for mortgages but even for lesser services like current account switching. One of my colleagues has done the latter of these recently and found the process fairly arduous and this is someone with a very good knowledge of the finance sector.
Whilst HSBC have every right to only sell their products direct to clients they do not have a right to criticise the broker community in such a way. To look at a 'best' deal purely on the basis of rate is in itself false.
A best rate is a combination of rate, fees, likelihood and speed of offer, ability to lend on a certain type of property, whether the rate has early repayment charges or not, if it has offset, overpayment flexibility etc. etc. etc.
Finally I draw attention to one word in this article and that is that they are best placed to SELL their own mortgages. Not advise on but SELL. This alone makes me feel that HSBC have missed the point somewhat.
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Anonymous | 18 Oct 2011 10:14 am
Looks like there may be a couple of bitter brokers out there...
I arranged my mortgage with HSBC because they have the best rates and have nothing but praise for the service. I assume HSBC couldn't claim this statistic without evidence or back up so well done them! Cut out the middle man and save yourself some money!
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leeson antrobus | 18 Oct 2011 10:15 am
I frequently assist clients who have been declined by HSBC's stringent lending criteria. Rates published in best buy tables are only available to certain types of client that fit the lenders' requirements.
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Anonymous | 18 Oct 2011 10:18 am
HSBC seem to forget there are many lenders whom prefer the intermediary route, and there are many applicants whom prefer to use brokers, to save them time and hassle. Its just a question of time when the tables turn.
If HSBC think that offering best non advised deals with high insurance premiums and clients having to do all the work themselves, then good luck to them.
Unfortunately, mortgages are a minefield of information for applicants and there are many whom need advice with the right overall products.
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David Sheppard, Perception Finance | 18 Oct 2011 10:23 am
Anonymous 10.14am. We are not bitter in my opinion. I am quite happy to have competition in this marketplace.
What I object to is a lender going on record to say that brokers are not needed when I can recount many stories to contest this.
Well done for being able to secure your mortgage direct but there are many others that are not so fortunate as you.
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Calvin Oram | 18 Oct 2011 10:23 am
Anonymous | 18 Oct 2011 10:14 am
I assume you work for HSBC and are part of their well oiled PR machine that seems to make news out of non-news
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