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Gap between direct and broker rates up 0.69%

The price difference between the average direct and intermediary two-year fixed rate has shot up by 0.69% in the past year, according to data from

The average broker two-year fix is now 0.73% more expensive than the average direct two-year fix.

The price of an average two-year fixed deal for direct customers is 4.30% and the average price of a two-year fix through brokers is 5.03% – a difference of 0.73%.

A year ago, the average direct two-year fix was 4.47% and the average intermediary two-year deal was 4.51%. The differential peaked at 0.85% in March, when the average direct deal was 4.05% and the average intermediary deal was 4.9%.

But despite the steady year-on-year comparison, there has been considerable volatility in this price differential. For example, the differential was 0.62% last month in favour of direct deals.

Meanwhile, the differential between two-year trackers is only 0.03%, compared with 0.04% a year ago, with the average direct deal at 3.80% and the average intermediary deal at 3.83%.

The gap between the price of direct and intermediary five-year fixed rates has remained broadly stable over the past year.

Currently, the average direct five-year fix is 4.81% and the average intermediary deal is 5.05%, a difference of 0.24%. A year ago, the difference was 0.30%, in favour of direct deals. The differential fell to 0.21% last month.

Aaron Strutt, head of communications at Trinity Financial Group, says mortgage rates are often a game of swings and roundabouts, with direct deals going up one week and broker deals the next.

He says: “There are a lot of lenders that do not dual price and most still do more business through brokers than direct.”

He adds that he has not seen any noticeable difference in the past few months between deals offered direct and through brokers.

And even when the same deals are offered via brokers at a higher rate, Strutt says customers are often still willing to use a broker because of the advice they can give and because the products still offer favourable criteria.


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