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Brokers slam ‘unfair’ pricing as two-year fixes cost 1% more through brokers


Brokers have hit out at lenders’ dual pricing strategies as figures show two-year fixed rates are 1.14 per cent more expensive when taken out through a broker.

Research from shows while average rates on five-year fixes are roughly the same through both channels, two-year fixes are 1.14 per cent more expensive on average through intermediaries than direct. The average two-year fixed rate, taken up to 60 per cent, 70 per cent and 80 per cent LTV, is 3.02 per cent direct and 4.16 per cent through intermediaries.

Brokers have labelled the differential “unfair” and have questioned lenders’ motives. This comes after a number of lenders launched record-low two-year fixes at 1.99 per cent or below in recent months.

Your Mortgage Decisions director Dominik Lipnicki says: “It is unfair for brokers and it is unfair for clients, as they are unable to get professional advice without paying a higher rate.

“We find it difficult to understand why the regulator does not look as this closer.”

Chadney Bulgin mortgage partner Jonathan Clark says: “Lenders appear to be offering similar five-year fixed rates through broker and direct channels but there continues to be a gap on two-year fixed rates in favour of the direct deals, which are now as low as 1.74 per cent.

“It appears lenders are happy to take our customers away from us for two but not five years, possibly because the broker channel will be proactive in considering other lenders at the end of the initial rate.”

Tesco, Abbey, HSBC and Yorkshire Building Society have launched two-year fixes at 1.99 per cent or lower since October.

Currently, the lowest available mortgage rate is a direct-only two-year fix from Chelsea Building Society at 1.74 per cent for loans up to 60 per cent LTV.


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