Over half (55%) of UK consumers are unaware that a mortgage broker could offer more product options than a bank or building society, according to Legal & General Mortgage Club.
The intermediary firm’s campaign, titled ‘Mortgage Myths – Value of a Mortgage Broker’ aims to challenge a buyer’s misconceptions when securing a mortgage, indicating the important role advisers can play in finding better deals for consumers.
The research showed that 48% of homeowners and prospective buyers chose not to use a broker because they believed their bank or building society provided a good deal. Some 15% of consumers thought that going direct would land them cheaper mortgage deals, while 19% didn’t see the value a broker would add.
The notion that brokers and banks had access to the same mortgage products and deals was believed to be true by 19% of all respondents surveyed. This is despite there being 29,886 products available to those who use a broker, compared to just 3,721 products for consumers who choose direct.
L&G Mortgage Club asked consumers whether they agreed with a series of statements about mortgage advice. Just 14% thought their bank or building society would be able to provide the same advice as a mortgage broker.
Only 44% of respondents surveyed were able to identify that a mortgage broker works for the borrower, while 29% believed that brokers worked on behalf of the lender.
In light of the majority of borrowers being unsure of a broker’s role, the campaign encourages consumers to speak to an adviser about their mortgage options as opposed to heavily depending on their bank or building society.
Jeremy Duncombe, director, Legal & General Mortgage Club, commented: “As an industry, there clearly is an insignificant amount of work to be done to change these attitudes, educate consumers and promote the advantages of using a mortgage broker.”
“Brokers can offer consumers exclusive rates to their benefit and provide them with access to specialist lenders if they haven’t been successful on the high street.”
He added: “Ultimately, we hope our campaign will encourage brokers and the wider industry to dispel the myths surrounding mortgages and encourage consumers to speak to a professional mortgage adviser, who can guide borrowers and provide the best advice when making the biggest financial decision of their lives.”