direct lender mortgage deals account for 81% of lowest rates

Direct lenders provide 100% of best buys in two year discount, lifetime tracker and five year fixed mortgage categories, report HSBC.

Related topics:  Mortgages
Millie Dyson
18th October 2011
Mortgages
Direct mortgage lenders have continued to dominate best buy tables in the past year, with 81% of the market leading rates being offered directly by providers.

Research by independent data provider Moneyfacts 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 year fixed, two year discounts and lifetime trackers.

Over the last year (Oct 2010-Sept 2011), the lowest rate offered by direct lenders has been on average 0.14% points lower than the best rate offered through the intermediary channel.

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 the margin has been 0.25%, for lifetime trackers 0.19%, and for five year fixed 0.18%.

The two year fixed category was the only one dominated by an intermediary provider thanks to a single broker product which was on offer during the research period.

Peter Dockar, HSBC Head of Mortgages, said:

"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. 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.

Peter Dockar continued:

"Borrowers need to check newspaper best buy tables, comparison sites and lenders directly to ensure they are getting a great deal. HSBC accepts around 9 in 10 of all customers who apply for a mortgage with the bank and the growth of our mortgage business backs this up."

Over the past five years the HSBC group has quadrupled its mortgage market share and continue to dominate best buy tables.

Earlier this month HSBC committed to making a further £350m available to borrowers with equity or a deposit of 15% or less by the end of the year. A minimum of £250m will be reserved for first time buyers. Maximum loan to value is 90%.
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