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Direct only mortgage deals account for 93% of lowest rates

HSBC has analysed data supplied by Moneyfacts which shows lenders dominate lowest rates across fixed, tracker and discount mortgages.

Analysis of data supplied by Moneyfacts has revealed that of 96 mortgage deals which held the position of lowest rate in the market at some point over the last two years, only on six occasions could brokers beat the rate.

By analysing the independent Moneyfacts data, HSBC looked at the lowest mortgage rate available from mortgage brokers and directly from lenders, across the four most popular mortgage categories: two year fixed, five years fixed, two year trackers or discounts and lifetime trackers.

The difference in rates was most significant for two year trackers and discounted mortgages, over the last two years, the cheapest direct mortgage has on average been 0.47% cheaper than the best deal available from brokers.

Similarly for lifetime trackers the margin has been 0.32%, for two year fixes 0.26%, and five year fixes 0.19%.

The average gap between all mortgages studied was 0.31%, for at typical £150,000 mortgage it equates to £465 per year in extra interest.

Martijn van der Heidjen, head of mortgages at HSBC, says: “This research shows just how much the mortgage market has changed over the last two years. With loans available from brokers failing to beat direct lenders lowest deals for over 90% of the last two years, customers can no longer rely on brokers to get them the best deal in town.”

At the height of the property cycle in 2007, brokers sold as many as 7 in 10 of all mortgages.

Van der Heijden, adds: “No one can argue that shopping around isn’t the most sensible approach to take when looking for a new mortgage. 

“Going to a broker can be a useful part of this process, but as this research clearly shows it definitely shouldn’t be seen as the route to guaranteeing you the best deal. Borrowers need to check newspaper best buy tables, comparison sites and lenders directly to ensure they are getting a great deal.”

HSBC says it has never sold its mortgages via intermediaries, the bank’s strategy is that it 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. 

It says the growth in directly sold mortgages is proof that more lenders are realising that holding the ongoing relationship with their customer is more important than just making another sale.

HSBC says it accepts around 8 in 10 of all customers who apply for a mortgage with the bank.

HSBC was the largest net mortgage lender in the UK in 2008 and second in 2009, with a market share trebling in two years from 3% to 10% of all mortgage sold in the UK.


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  • Tom Cleary 3rd August 2010 at 10:17 am

    Have HSBC published their decline rate recently? The last one stated that they decline over 80% of their applications. It also takes around 8 weeks from initial approval to instruct a survey. Try telling that to a anxious vendor!!??

  • Brian 2nd August 2010 at 5:56 pm

    I have just completed a mortgage for an employee who works as an IFA for HSBC. As he said, you could get a slightly cheeper mortgage going direct, however, the rates change everyday so once you have booked an apt with whoever, when you get to see them, they may have pulled the rate!

  • chris jones 2nd August 2010 at 1:00 pm

    And this “comparison” shows what exactly? Until you factor in lenders fees (which this set of statistics doesnt mention at all) youve got completely pointless data which is simply being used by HSBC to undermine the publics confidence in brokers. I cant believe for one minute that HSBC are foolish enough to do a comparison based purely on headline rates with no reference to lenders fees and draw any kind of conclusions from it. If it isnt an attempt to undermine brokers and they really do place this much emphasis on headline rates with no reference to lenders fees then i pity anyone going direct for a mortgage. “ill have the 0.25% fixed for life please, wait a minute, whats this 25,000 lenders fee all about then?”

  • Stuart White - Zone Financial Planning 2nd August 2010 at 12:20 pm

    Clients coming to brokers deserve the right to impartial advice. A broker’s research should also include knowledge of newspaper ‘best buy’ tables too!

    Should a broker not be impartial and truely independent with their recommendations then they should clearly state this as a short-coming to their advice to the client. It is then down to their client to decide whether to proceed.

    Preying on the general public’s naivety or misguided trust in the adviser’s supposed impartiality is completely unacceptable and only leads the public continuing to critise our industry for putting the adviser’s interest before that of their client.

  • Aaron Strutt 2nd August 2010 at 11:01 am

    HSBC used to sell its mortgage through brokers via Pink Home Loans.