Should I Use a Mortgage Broker or Go Direct to a Lender?

When your fixed interest rate or mortgage product comes to an end, it is an important moment to review your options.

At this stage, borrowers typically have two routes. You can either deal directly with your existing lender or seek advice from a mortgage broker. While it may seem easier to go straight to the lender, this is not always the most beneficial option.

Understanding the differences between the two approaches can help you make a more informed financial decision.

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What Happens When Your Fixed Rate Ends?

When your current mortgage deal expires, you will usually move on to your lender’s standard variable rate if no action is taken. This rate is often higher, so most borrowers look to secure a new product before this happens.

If you are planning to raise additional funds or change lenders, many borrowers naturally turn to a broker for advice. However, if you are simply looking to switch to a new deal with your existing lender, some borrowers assume it is best to deal with the lender directly, but this is not the case.

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Advice Versus No Advice

One of the biggest differences between using a broker and going direct is the level of advice you receive.

A lender will only present their own products and will not advise whether there are better options available elsewhere. They will not assess whether switching lenders could result in a lower interest rate or better long-term outcome.

A broker, on the other hand, provides advice based on your circumstances. This includes:

• Reviewing whether a better deal exists with another lender
• Understanding your full financial position
• Recommending the most suitable option based on your goals

This can be particularly valuable if your circumstances are more complex, such as adverse credit, unusual property types, or specific borrowing requirements.

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Access to the Wider Market

Dealing directly with a lender means you are restricted to that lender’s products.

Using a broker gives you access to a much wider range of lenders and mortgage products. Even if you ultimately stay with your existing lender, a broker can confirm whether that is genuinely the best option available.

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Avoiding Unnecessary Declines

Applying to lenders without guidance can lead to unnecessary issues.

Each declined application may result in a hard credit search, which can affect your credit profile. It can also waste time as you move from one lender to another trying to find a suitable option.

A broker understands lender criteria and will guide you towards lenders who are more likely to accept your circumstances. This improves your chances of approval and reduces unnecessary applications.

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Proactive Monitoring of Interest Rates

One of the key benefits of working with a broker is ongoing market monitoring.

At Advocate Finance, we regularly secure new products for clients up to three months before their current rate expires. We then continue to monitor the market up until completion.

If rates decrease during that period, we automatically move the application to a lower rate and notify the client of the saving. This proactive approach has saved many clients significant amounts over the term of their mortgage.

A lender will not typically offer this level of ongoing monitoring, which means you could lock into a higher rate when a better option becomes available.

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Are the Costs Any Different?

In many cases, the cost of arranging a new product is the same whether you go direct or use a broker.

Some brokers charge fees, but at Advocate Finance, we do not charge for product transfers. This means you benefit from advice, access to the market, and ongoing monitoring at no additional cost for this type of transaction.

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Are the Products Any Different?

A common misconception is that lenders offer exclusive deals to customers who go directly to them.

In most cases, this is not true. Brokers have access to the same products as those offered directly by lenders. This means you are not missing out on better rates by using a broker.

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Saving Time and Reducing Stress

Arranging a mortgage can be time-consuming and complex, especially when comparing multiple lenders and products.

A broker manages the process on your behalf, presents suitable options clearly, and handles the application process. This can save a significant amount of time and reduce the stress involved in making the right decision.

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Final Thoughts

While dealing directly with a lender may seem straightforward, it can limit your options and mean you miss out on better opportunities.

Using a broker gives you access to the wider market, personalised advice, and a more proactive approach to securing the right deal. In many cases, this can lead to better financial outcomes and a smoother overall experience.

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How can Advocate Finance help?

We work with a wide panel of specialist lenders to ensure your property and circumstances are assessed correctly and your borrowing potential is maximised.

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