Trying to decide whether to go through a mortgage broker or a bank? We know it’s not a straightforward decision, as both have their advantages, such as your ease of access, assisting with your approval chances and supporting you throughout the process.
In this guide, we’ll break down the key differences between brokers and banks, including costs, product range, and how much help you can expect.
For clarity, we’ll use “bank” to refer to traditional mortgage lenders, such as banks and building societies, and “broker” to mean independent advisers not tied to a single lender.
Is It Better to Get a Mortgage from a Bank or a Broker?
The answer to this question isn't just about who offers the cheapest deal, its about how much choice, support, and flexibility you’ll get throughout the mortgage process.
Below we explain how banks and brokers compare in key areas such as product range, the approval process, costs and the level of support they provide.
Product Range
Advisers at banks can only recommend mortgages from their range of products, which may limit your options and result in a deal that doesn't meet your expectations, particularly around interest rates.
Mortgage brokers, especially whole-of-market brokers, usually have access to a wide range of lenders, giving you more choice and potentially better-suited products.
Expertise and Support
Advisers from banks have strong knowledge of mortgages but are limited to providing advice regarding products from their own financial institution.
Mortgage brokers often offer broader market expertise and have access to multiple lenders. They can recommend products for which you're more likely to qualify for and support you throughout the mortgage process. They will provide you with updates from lenders once the application has been submitted.
It has been anecdotally reported, in forums online, that brokers may assist in resolving issues such as poor property survey results to help keep the loan on track.
Costs of Service
Banks typically don’t charge for mortgage advice, since they’re only assessing your eligibility for their products.
Mortgage brokers may charge a fee - this could be a flat rate, hourly fee, or a percentage of the loan. This can be paid by you, the lender, or both. Lender-paid fees are usually percentage-based.
Based on research conducted by Boon Brokers, broker fees can range between £200 to £500 on average. This is supported by anecdotal reports, stating users were charged between £250 to £400. Always check these costs before committing to a specific broker.
Approval Chances
When applying through a bank, you’re responsible for completing the application form and providing the correct information, both of which can increase the risk to delays or rejection if there is mistakes or missing information. While some banks do offer support during the process it is often minimal.
Mortgage brokers, on the other hand, typically help complete the application, check for any discrepancies and advise you on the lenders most likely to approve your mortgage based on your circumstances.
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The Key Differences Between a Mortgage Broker and a Bank
The below is a side-by-side look at how banks and brokers typically compare across key decision-making factors. It should be noted that these do not apply to all banks and brokers and should be regarded as guidance only:
| Factor | Bank | Broker |
|---|---|---|
| Products | Own range | Access to products from multiple lenders, including specialists |
| Process | You apply directly | Can handle application and paperwork on your behalf |
| Key Attributes | Direct-only deals | Personalised service and potentially better deals |
| Cost | No cost for advice | Some charges may apply |
| Expertise | Knowledge of own products | Broad understanding of the whole market |
| Likelihood of Approval | Strict eligibility criteria | Can find lenders likely to approve you |
| Support | Limited once the mortgage offer is made | Ongoing support, including help with amendments or future applications |
| Independence | Only offer their products | Tied to certain lenders or fully independent |
The Key Questions to Help You Choose Between a Broker and a Bank
How Complex Is Your Situation?
You'll need to consider your circumstances, such as adverse credit history, current financial commitments, or employment status (e.g. self-employed). While most lenders favour applicants with stable, consistent income, some specialist providers cater for more complex situations. This is where a broker can prove useful.
How Important Is Getting the Absolute Best Rate?
While securing a low interest rate can significantly reduce the total cost of your mortgage, it’s not the only factor to consider. Other elements, such as flexible repayment terms and product fees, can be just as important.
In some cases, a slightly higher rate may come with lower upfront costs, better features, or a greater chance of success. A broker should be able to help you weigh up these factors based on your circumstances.
Are You Confident Negotiating Yourself?
Many borrowers think lender offers are final, but negotiation is possible, especially if you’re remortgaging or a returning customer with a strong repayment history.
You’ll need to research the market, so you have terms, examples and comparisons to hand when you negotiate with the bank.
Would You Prefer Convenience or More Control?
If you're short on time or unfamiliar with the mortgage process, it's worth using a mortgage broker to assist with the paperwork. But if you're comfortable managing it, going directly to a lender gives you more hands-on control.
How Much Guidance Do You Want?
Every property transaction is unique, with certain factors occasionally affecting the mortgage process. Consider how much support you want with aspects such as mortgage offer extensions or amendments to the mortgage following a survey.
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How to Find a Good Mortgage Broker
To find a good mortgage broker, start by identifying one who fits your needs, e.g., a remortgage specialist. Look for brokers who are transparent about costs, act in your best interest and are FCA-regulated – the latter of which means they must provide advice tailored to your needs.
Speak to several brokers to compare their experiences and check reviews on sites such as Trustpilot before selecting your chosen broker.
Compare Mortgage Brokers
If you wish to start comparing mortgage brokers today, simply fill in our comparison form and we can match you with up to 5 companies. You’ll be able to talk through your requirements with them, understand their experiences and read any reviews left by customers. All of our partners are verified as FCA-regulated, which should provide you with peace of mind when using our form.
FAQs
Do Brokers Get Better Deals Than Banks?
In many cases, yes. Brokers often have access to exclusive deals not available to the public, but this depends on the broker’s lender network. It’s always worth comparing before assuming one route is cheaper.
Is It More Expensive to Use a Mortgage Broker?
At first glance, yes, a mortgage broker is more expensive as they often charge a fee for their advice whereas banks typically do not. However, that fee could lead to savings in interest rates and repayment terms. Therefore, in the long run the benefits will outweigh the initial cost
Be cautious of high fees or pushy sales tactics. If a fee is charged, it can often be added to your mortgage, but you'll pay interest on it. It's worth mentioning that fee-free brokers can still offer excellent service.
Can a Broker Improve My Chances of Mortgage Approval?
Yes, potentially. Independent brokers deal with lenders and underwriters daily, so they understand which providers are more likely to approve your application - especially if your finances, credit rating, or property details are less straightforward.
While they can’t guarantee approval, they aim to match you with lenders best suited to your situation.
