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Thousands miss out on finding a better mortgage by not speaking to an adviser

Thousands of borrowers could be missing out on a better mortgage deal by not speaking to an adviser, research from Legal & General Mortgage Club has found.

The survey of over 2,000 UK homeowners revealed that 31% of consumers who went direct to a lender didn’t understand how a mortgage adviser could help with their search.

The findings also showed that 69% of borrowers who went straight to a lender hadn’t remortgaged in the last five years, while 74% stayed put because they felt they had a ‘good deal’.

However, Legal & General says without seeking mortgage advice, these individuals would have missed out on the thousands of extra mortgage deals that are only available through a mortgage adviser.

With the research, the Legal & General plans to tackle the misconceptions about mortgage advisers and raise awareness about how they can help borrowers to find the ideal mortgage for their needs.

The analysis showed that the mortgage industry still needs to demonstrate the value of mortgage advice to borrowers – just 30% of those who went direct to the lender said that they would likely speak to a mortgage adviser next time.

Meanwhile, 60% who didn’t seek advice when they took out their last mortgage didn’t know mortgage advisers were there to help the borrower, and just over a third (34%) thought a mortgage adviser was there to support the lender.

What’s more, borrowers going through a mortgage adviser have access to thousands more mortgages than those going direct to the lender, including specialist mortgages for the self-employed and later life lending solutions such as lifetime mortgages.

In fact, data from mortgage sourcing platform Twenty7Tec revealed that almost 12,000 mortgages are available through mortgage advisers, compared to just over 2,000 directly on offer from lenders to consumers.

Homeowners who benefitted from a mortgage adviser searching the market for the best mortgage deal were more likely to have switched in the last five years (29%), compared to just one in five (19%) of those who went direct.

These borrowers would have benefitted from opportunities to pay less interest as mortgage rates fell, with the average rate on a 2-year fixed term mortgage falling from 2.6% in June 2014 to 1.48% in June 2017.

Borrowers who used a mortgage adviser were also in favour of doing so again. Nearly all (98%) said that they found the support of a mortgage adviser ‘valuable’ and a further 95% said they would recommend using a mortgage adviser to family or friends.

“Whether someone is taking out their very first mortgage or unlocking housing wealth in retirement, the value that mortgage advisers can bring to borrowers can make a huge difference when it comes to moving onto and up the property ladder,” Kevin Roberts, director at Legal & General, said.

“Yet, our research shows that potentially thousands of borrowers still don’t know how a mortgage adviser can help with their mortgage search and as a result they could be missing out on a better deal.”

He concluded: “Buying a home is the biggest purchase an individual will make in their lifetime, so it’s vital for buyers to speak to a mortgage adviser who can help them to understand their borrowing needs and find the right mortgage.” 

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