Research by 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.
The research found that over the past year (Oct 2010-Sept 2011), the lowest rate offered by direct lenders has been on average 0.14% lower than the best rate offered through the intermediary channel.
Moneyfacts said that 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 was 0.25%, for lifetime trackers 0.19%, and for five-year fixed 0.18%.
In a statement HSBC said: “HSBC has never sold its mortgage 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, head of mortgages at HSBC, said: “The research shows that the 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.
“Borrowers need to check newspaper best buy tables, comparison sites and lenders directly to ensure they are getting a great deal. HSBC accepts around nine in 10 of all customers who apply for a mortgage with the bank and the growth of our mortgage business backs this up.”
David Hollingworth, head of communications at London & Country, said: “Looking at their figures and sales, they’re clearly based on lowest rates and do not take into account loan to value and the fees attached.
“It highlights the whole benefit of being a broker and why customers continue to seek advice from brokers because they understand there’s much more to mortgages than just headline rates.”
Ben Thompson, managing director at Legal & General mortgage club, said: “The fact is that direct to consumer only mortgage products make up just 19% of all the mortgage products available in the UK and HSBC’s direct only offering represents 2% of this direct only market.
“Although HSBC’s products are highly competitive and offer some very good rates that does leave a huge amount of choice and alternatives elsewhere that borrowers should be aware of when searching for a loan.
“In a broader sense best buys can also be misleading as they are never personalised and frequently lead consumers to disappointment as in a number of instances they simply don't meet the qualifying criteria for those ‘best buy’ mortgages.
“Consumers need rounded and full advice from experienced and qualified advisers who will make a full assessment of needs and desires and tailor recommendations accordingly.
“Best buys can be indicative, but independent mortgage advice can only be offered by an intermediary and this comes with wider benefits such as comprehensive choice from a significantly wider lender selection.”
Vic Jannels, group executive chairman at All Types of Mortgages, said: “I would take the figure that they accept nine out of 10 of all applications with a pinch of salt. We have seen many borrowers turned away from HSBC with reasons that we can’t understand and we’ve been able to place those deals.
“We’re not criticising why they’re getting declined - that is the bank’s prerogative - however we are aware that from our experience, nine out of 10 do not get assisted in that way.”
Alan Cleary, managing director of Precise Mortgages, said: "Some may regard 'best buys' as just window dressing as most borrowers don't qualify for them due to the stringent underwriting and LTV requirements. We strongly believe that it is only brokers who are able to offer all borrowers whole of market mortgage advice and product choice and we are determined to support brokers and their clients by offering a real choice in the marketplace.”
