Mortgage Broker vs Going Direct to a Bank: Which Is Better?
Most UK homebuyers use a mortgage broker, but some go directly to their bank. Each route has genuine advantages depending on your financial situation and how straightforward your application is.
Mortgage Broker
- ►Whole-of-market brokers access products from across the market, including exclusive broker-only deals
- ►Brokers compare lenders' affordability criteria, not just rates
- ►Fee structures vary: fee-free (paid by lender commission) or flat fee (£300–£600 typical)
- ►FCA-regulated and liable for their advice
Pros
- ✓Access to the widest range of products including exclusive deals
- ✓Expert guidance on complex situations (self-employed, bad credit, unusual properties)
- ✓Saves significant research time
Cons
- ✗Some charge a broker fee on top of lender arrangement fees
- ✗Not all brokers are truly whole-of-market
- ✗Can add a stage to the process for straightforward applications
Best for: Most buyers — especially first-time buyers, the self-employed, or anyone with a non-standard situation.
Direct to Bank / Building Society
- ►Apply directly to the lender — no intermediary
- ►Some lenders offer products only via direct channel
- ►Existing customers may receive preferential rates (loyalty pricing)
- ►No broker fee payable
Pros
- ✓No broker fee if the lender does not charge arrangement fees
- ✓Faster for simple applications where you already know the product you want
- ✓Existing banking relationship can smooth the process
Cons
- ✗Only see one lender's products
- ✗No professional comparison or advice on suitability
- ✗May miss better rates or criteria from other lenders
Best for: Borrowers with very simple applications, strong existing bank relationships, or who have already done thorough market research.
Bottom Line
For most buyers, an FCA-authorised whole-of-market broker will find a better deal and provide valuable advice — particularly for first-time buyers or complex situations. Going direct is reasonable only if you have done your own market research and are confident about the product.
Frequently Asked Questions
Do brokers have access to better rates than I can find online?
Often yes. Lenders offer exclusive products to brokers that are not available on comparison sites. Broker-only deals can be 0.1–0.3% lower in rate, which adds up significantly over a 25-year term.
How is a mortgage broker paid?
Most brokers receive a commission (procuration fee) from the lender on completion — typically around 0.35% of the loan. Some also charge a client fee. Fee-free brokers are paid entirely by lender commission; always ask upfront.
Is a mortgage broker's advice legally binding?
FCA-regulated mortgage advisers are liable for the suitability of their recommendations. If they recommend an unsuitable product, you have grounds to complain to the Financial Ombudsman Service.
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