Using the Home Buyer sourcing system powered by Defaqto, the cheapest mortgage deal over two years has been tracked using two generic examples based on the Council of Mortgage Lenders’ average borrower statistics. These are: a first time buyer purchasing a property for £127,500 at 90% LTV, and a second time buyer purchasing a property for £185,000 at 73% LTV.
Tracking the actual difference between the cheapest cost of an intermediary product and the cheapest cost of a direct-to-lender product through June and early July, shows that direct-to-lender products have been consistently cheaper than intermediary products by at least £1189 (£49.54 pcm) and at most £2002 (£83.41 pcm) over the first two years of the loan.
Samples taken in early June, late June and early July show the differentials as follows. For first time buyers the monthly savings in taking the direct-to-lender option have been £49.95, £83.41, and £63.12 respectively, with the figures for second time buyers being £49.54, £53.33, and £56.79
Richard Angliss, managing director of Home Buyer Systems commented: “These statistics are facts, not speculation, and they support our view that the only way forward for mortgage intermediaries is to change their business models to enable them to research and recommend direct-to-lender products and to charge the customer a reasonable fee for this service, with the customer still enjoying a considerable saving.”
