The consumer comparison website claimed this morning that the broker channel was struggling to compete with direct from lender products in the best buy tables.
But Mark Lofthouse, CEO of mortgage sourcing system Mortgage Brain, said the Moneysupermarket research was not reflective of the whole of market.
Analysis from Mortgage Brain showed 7,397 live mortgage schemes across the whole market, including variations of the same deal.
Some 84% of those deals were not available direct from lenders, meaning just 16% of mortgage deals are available direct from lenders – a far cry from Moneysupermarket’s claim this morning. In a spurious press release issued to gain publicity the price comparison site claimed "nine out of ten mortgage products currently available direct from mortgage lenders". But this research was only based on best buy 2 and 3-year trackers.
Mortgage Introducer research reveals that a fair analysis of 2-year fixed rates puts three intermediary deals in the best buy top five table, compared to Moneysupermarket’s one.
Danny Lovey, Basildon-based broker at The Mortgage Practitioner, said: “You could say that Moneysupermarket is being a touch disingenuous and merely talking their book in order to get more hits on their web page.
“These statistics remind me of a drunk needing the lamp-post for support rather than to provide illumination.”
And Fahim Antonaides, group director at London-based broker Mortgage Centre IFA, said the Moneysupermarket research was not only wrong, it did not explain the pros and cons of each deal.
For example, The Mortgage Works offers a 2-year fixed rate of 2.69% at 70% loan to value with a 2% arrangement fee. Moneysupermarket does not list this deal and puts an Alliance & Leicester deal at 2.64% at the top of the table with at 70% LTV and 2% arrangement fee.
Antonaides said: “The TMW deal is not as good as the A&L deal on rate (just 0.05% higher) but it’s a different proposition. For example TMW take the average of the past two years’ net profits on self-employed cases, which means if you have declining profits, it could work in your favour.
“TMW also uses Equifax as opposed to Experian which means someone who has failed on credit score with A&L which uses Experian, then they might get a pass through TMW.
“Whilst this issue can work both ways, the point is that Moneysupermarket is not going to be able to tell you this type of specific information. Also TMW assesses affordability on an interest-only basis whereas A&L does it on a repayment which can make a difference on how much one can borrow.”
Similarly, on a 2-year fixed rate of 2.79% on a 70% LTV with a £2,500 arrangement fee, available from Alliance & Leicester via brokers, borrowers arguably do better than they would by choosing the 2.64% A&L deal with a 2% fee, which appears on top.
On a typical loan of £200,000 the direct deal would cost borrowers £14,560 in total over two years. The 2.79% deal would cost £13,660 over the same period.
Lovey added: “I think whilst it is true that sometimes direct deals can work out fine the stats provided by Moneysupermarket only go to show how wise it is to have advice and have deals thoroughly analysed by a professional rather than blindly follow what appears to be cheap on some web sourcing sites.”
Moneysupermarket analysis showed that on 3-year fixed rates, all five best buys were available direct from the lender, but Mortgage Introducer research puts deals through brokers from The Mortgage Works and Accord in the top two spots.
Antonaides said: “They have picked five top deals in each category but omitted the ones available through brokers. If we add the broker ones in the best buy table then out of the 2-year fixed rates there are another two in the top five and both the broker ones are better on criteria and LTV.
“On the 3-year fixed table the top two deals are broker only and on the tracker deals there is one broker deal which is better than the rest on LTV. I don’t make that nine out of 10 do you?”
Despite being contacted by Mortgage Introducer at 9:30am on Friday morning after the embargoed press release was issued last Thursday and despite best efforts throughout the day it was only this morning just before 11am that Moneysupermarket withdrew its analysis and issued the following statement.
“The release was intended to highlight the fact that the majority of mortgages in the market are direct to lender products only, something that we stand by, and that consumers need to shop around to make sure they see the whole of the market.
“This is particularly important for those customers who have used brokers in the past and do not realise how the market has changed as a result of the credit crunch. However, having listened to your feedback we have removed our release from Headlinemoney while we review our research.
“We support the work of intermediaries and understand that both brokers and direct providers have a role to play in helping consumers secure the right mortgage.”
