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Consumers feel safer going direct to lenders, study shows

Almost half (49%) of consumers who purchased a mortgage recently said they felt more secure dealing with a lender directly, research from MCI Club reveals.

The study of over 1,500 mortgage buyers shows that 52% who engaged a mortgage broker did so for reassurance, 46% to access more lenders, and 38% for better rates.

The results highlight that all parties in the intermediary market ‘have more to do’ to convey the value that mortgage brokers add to the process of getting a mortgage.


Conducted by MCI’s parent company earlier this year, the DPR Group’s Mortgage Insights 20/21 research investigated the challenges faced by mortgage consumers, brokers and lenders alike. 

When looking at how many consumers go direct to lender compared to those using a broker, mortgage brokers roughly matched that of consumers with 72% stating that they believed the total amount on direct to consumer (D2C) origination was between 11% and 40%.

What’s more, 14% of both brokers and consumers believed that more product choice encouraged consumer engagement.

Some 21% of brokers stated that borrowers come to them because they recognise the value of advice, and 31% felt that by offering ease of support and service, it helped to ensure that clients came to them rather than going direct to lenders.

Looking ahead five years, 43% of consumers felt that between 11% and 40% would continue to go direct to a lender. On the other hand, 31% of brokers stated that 90% of all new mortgage business would come from advice via brokers.

In the reason for their responses, brokers focused on lender branch closures, consumers’ growing preference for shopping around, the level of service brokers offered, and improved technology.

Melanie Spencer, head of the MCI mortgage club, says there is still a disconnect between consumer perception and how brokers believe they are positioning themselves in the market.

She comments: “We all know the true value of advice and the reassurance this provides consumers in navigating the congested landscape of solutions that will not only meet the needs of each client today, but also into their futures. However, it is clear that we need to communicate this both more widely and more clearly.”

On the subject of defending against lenders going directly to the consumer, Spencer says it’s ‘heartening’ that brokers understand the subtle challenges of quality of service and accessibility in the next five years.

“There is a solution to help counter the D2C conundrum, however. It will be those who look to simplify the advice process and embrace technology who will lead the charge. It is more essential than ever for brokers to support their service levels through their back-office systems.”

She concludes: “This will enable them to reach out to both new and existing consumers through their consumer facing technology.”


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