Mortgage broker vs going direct to your bank

Going direct to your bank can work well if you have a clean credit file, straightforward employed income and an existing relationship with a lender whose criteria you already meet. A broker earns their place when you need more than one lender considered, when your income or property is unusual, or when you do not want to research criteria yourself. Neither route is universally cheaper, and you can sensibly explore both before committing to an application.

A branch or telephone adviser at a bank gives regulated advice, but only on that bank's own products. That is not a criticism, it is the nature of tied advice. They will assess you against their own criteria and recommend from their own range.

If you fit their criteria and their pricing is competitive that week, this is a perfectly good outcome. Existing customers sometimes get a smoother identity and income verification process because the lender can see your account history, and in a few cases a lender will show retention or loyalty pricing to existing borrowers.

What they cannot do is tell you that a different lender would lend you 30,000 pounds more, or would accept your one year of self-employed accounts, or would take 100 percent of your bonus rather than 50 percent. That is the gap a broker fills.

Some lenders reserve certain products for borrowers who apply directly, and some smaller lenders and building societies work only through intermediaries. So there is no route that guarantees you see everything.

In practice, the number of genuinely direct-only products that beat the intermediary market on total cost is limited, and it moves. A good broker will usually tell you if they think a direct deal is worth checking. If you want to be thorough, look at two or three lenders' direct ranges yourself and compare them against what your broker recommends, using the total amount payable over the fixed period rather than the headline rate.

Rates are visible to everyone. Criteria are not. Lenders differ enormously on questions like these.

• How many years of self-employed accounts they require, and whether they use the latest year or an average.
• How they treat bonus, commission, overtime and shift allowance.
• How they treat a day rate contractor, and whether they annualise the rate.
• What they do with a default, a missed payment or a settled county court judgment, and how old it must be.
• Maximum age at the end of the term, and how they treat lending into retirement.
• Whether they accept a gifted deposit from a sibling, a friend, or a non-resident relative.
• Their view on flats above commercial premises, ex-local authority blocks, timber frame, and short leases.

An experienced adviser carries a working map of these differences and can shortlist the two or three lenders likely to say yes to you. Reproducing that yourself means reading criteria guides that are often written for intermediaries rather than consumers.

Say you earn 42,000 pounds basic plus an average 9,000 pounds annual bonus over three years, and your partner earns 31,000 pounds. You want to buy at 375,000 pounds with a 60,000 pound deposit, so a 315,000 pound loan.

Lender X counts 50 percent of a bonus and only if it has been paid for two years. Your assessable income becomes 42,000 plus 4,500 plus 31,000, which is 77,500 pounds. At a rough four and a half times multiple that supports around 348,000 pounds, so you are fine but with modest headroom once outgoings are counted.

Lender Y counts 100 percent of a sustained bonus. Your assessable income becomes 82,000 pounds, supporting roughly 369,000 pounds on the same multiple.

Same borrower, same month, different answer. Neither lender is wrong. If you only ever ask your own bank, you never learn that the other one existed. Note that affordability is not really a simple multiple, since lenders run a full expenditure and stress-rate calculation, but the direction of the difference is real.

• You are taking a product transfer with your existing lender and staying on the same terms, no borrowing increase, no change in circumstances.
• You are employed, salaried, clean credit, buying a standard property with a healthy deposit, and your own bank has already given you a good figure.
• You have an unusually strong relationship with a lender, for example a private bank arrangement.
• You enjoy the research and are comfortable comparing total cost across several lenders yourself.

Product transfers in particular are often the least appreciated direct route. If your circumstances have not changed, taking a new rate with your current lender can be quick, cheap and sometimes fee-free, with no new affordability assessment in many cases.

• Self-employed, contractor, company director, or income from several sources.
• Any adverse credit in the last few years.
• New build with a deadline, where offer expiry and reservation timings need managing.
• Buy to let, especially through a limited company or with a portfolio.
• Non-standard property or lease issues.
• You have already been declined once, which makes the next application more delicate.
• You simply do not have the time, and you want someone else chasing the lender.

That last one is undervalued. A meaningful part of what you get is administrative persistence over six to twelve weeks.

This is the practical bit most people get wrong. You can compare routes safely if you understand the difference between the checks involved.

A soft search leaves a record only you can see and does not affect how other lenders view you. Many lenders and brokers can run a decision in principle using a soft search, and most eligibility checkers are soft.

A hard search is recorded on your credit file and is visible to other lenders for a period. Several hard searches in a short window can look like you are applying for credit repeatedly, which some lenders view unfavourably.

So the sensible sequence is this. First, check your own credit file with one of the main agencies so there are no surprises. Second, get an indicative figure from your own bank, ideally using a soft-search agreement in principle. Third, speak to a broker and let them run their research, again on a soft-search basis where the lender allows it. Fourth, decide on one lender and submit one full application.

• Ask every provider whether their decision in principle uses a soft or a hard search before you consent.
• Avoid submitting full applications to two lenders at once to see who says yes first.
• Do not apply for other credit, such as a car finance agreement or a new credit card, in the weeks before your mortgage application.
• Keep your accounts tidy for at least three months before applying, since lenders will read your bank statements.

Going direct avoids any broker client fee, but it does not avoid the lender's arrangement fee, valuation costs or anything else. It also does not get you a discount for the procuration fee the lender did not have to pay. So the cost saving from going direct is limited to the broker's own fee, which may be zero anyway.

Against that, if a broker finds a product that is 0.15 percentage points cheaper on a 300,000 pound loan, that is roughly 450 pounds a year of interest early in the term. Over a five year fix the difference comfortably exceeds most broker fees.

The reasonable conclusion is that the decision should not turn on the fee. It should turn on whether you need more than one lender's view of you.

If you decide you want that second view, the MortgageMatch directory lists FCA-authorised brokers you can approach directly and compare against whatever your own bank has offered.