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HSBC claims 81% of best deals offered direct

  • 18/10/2011
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HSBC claims 81% of best deals offered direct
HSBC has said borrowers cannot rely on brokers to offer the best mortgages, claiming that 81% of best buy deals over the past year were provided by direct mortgage lenders.

The lender based its findings on research carried out by Moneyfacts that looked at products offered across the four most popular mortgage categories: two-year fixed, five-year fixed, two-year discounts and lifetime trackers.

Over the last year, HSBC said the lowest rate offered by direct lenders was on average 0.14% less than the best rate offered through the intermediary channel, equating to £210 a year less for a typical £150,000 mortgage.

Two-year discounts had the largest margin at 0.25%, followed by lifetime trackers at 0.19% and five-year fixed at 0.18%.

However, HSBC found an intermediary provider dominated the two-year fixed category, but claimed this was due to one product that was on offer during the research period.

Peter Dockar, head of mortgages at HSBC, 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.”

However, Andy Pratt, chief operating officer at Alexander Hall, said that higher LTV deals must be taken into account in order to get the full picture.

He said: “It is accepted that, with the market as competitive as it is, direct lenders have attracted lower LTV business with good rates. There is no doubt that this would help give them the majority of business, although I don’t believe it is as high as 81%.

“Once we get to the higher LTV deals on the market, I think that 81% would drop significantly because the rate that a client can get will vary quite dramatically across lenders.

“Sometimes the deals that brokers have access to are more competitive compared to what is available direct. In cases such as this, a broker is invaluable source for customers looking to get the best deal on the market.”

Lea Karasavvas, director of Prolific Mortgage Finance, added: 

“The role of an intermediary is no longer simply to find the cheapest rate, it is finding a lender that will fit with the clients requirements and that is more challenging than it has been for a while in the industry.

“Let to buys, income stretches, bonus considerations, pure interest only mortgages, these are some of the many factors that will result in clients simply not being able to take advantage of the pricing offered by many of the direct lenders.

“We cannot deny that their pricing has been strong, however the current mortgage market is more challenging than it has been for a decade, mainly due to the criteria restrictions placed by lenders. Having 81% of the deals in the best buys is one thing, but the conversion of those rates into actual mortgage deals is another statistic I am keen to see.”

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