Home Buyer Systems unveils comparison index for brokers

18 November 2008

The analysis reveals brokers can save clients significant money by also recommending direct products rather than restricting their researches to products that are only available via brokers.

Home Buyer Systems says direct-to-lender products do not pay a proc fee, the broker can charge the customer a fee for the research and - if the customer approves- an additional fee for the administration of the direct-to-lender mortgage application.

The HBSI shows comparative data across remortgage, first-time buyer and second time buyer using Council of Mortgage Lenders figures for the average purchase price of properties: £182,000; £127,500; and £185,000 respectively.

Taking note of feedback from users, the results shown on the HBSI are grouped by LTV, which it believes to be the most useful and relevant way of comparing true costs for the mortgage borrower.

In all cases, the greatest savings are to be made at the higher LTV end.

At 90% LTV, the broker can save a second time buyer £5,674.00 over a two year period by recommending the cheapest direct product.

Remortgage customers could save £5242.00. The differentials reduce along with LTVs as far as 75%, but then rise again in all three categories at 60% LTV.

Richard Angliss, managing director of Home Buyer Systems, says: “Contrary to popular belief, the problem of differential pricing has not disappeared, and it is still a threat to the income streams of mortgage brokers that are wholly dependent on procuration fees.

"Not only does dual pricing persist – i.e. the same product, but more expensive via a broker – but comparable products are also cheaper direct from lenders that do not offer broker products, for example HSBC.

"Going forward, more and more brokers are looking for a system that enables them to research direct products and charge a research fee to the customer."

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