It says by using two generic examples such as a first time buyer purchasing a property for £127,500 at 90 per cent loan to value, and a second time buyer purchasing a property for £185,000 at 73 per cent LTV, it has attempted to track the cheapest mortgage deal over two years.
Tracking the actual difference between the cheapest cost of an intermediary product and the cheapest cost of a direct-to-lender product through June and early July, shows that direct-to-lender products have been consistently cheaper than intermediary products by at least £1189 (£49.54 pcm) and at most £2002 (£83.41 pcm) over the first two years of the loan.
Samples taken in early June, late June and early July show the differentials as follows. For first time buyers the monthly savings in taking the direct-to-lender option have been £49.95, £83.41, and £63.12 respectively, with the figures for second time buyers being £49.54, £53.33, and £56.79
Managing director Richard Angliss says: “These statistics are facts, not speculation, and they support our view that the only way forward for mortgage intermediaries is to change their business models to enable them to research and recommend direct-to-lender products and to charge the customer a reasonable fee for this service, with the customer still enjoying a considerable saving.
“Feedback from mortgage adviser blogs and other sources shows that some IFAs and mortgage brokers believe that they cannot recommend direct-to-lender products because the lender will not supply a KFI. This belief is erroneous, and the FSA confirms on its website that if an adviser has the ability to produce a KFI for a direct to lender product there is nothing to stop them doing so. Our HBSLite system, designed to give advisers everything they need to sell direct-to-lender products, can produce a KFI for every mortgage product currently on offer across the entire mortgage market.”