Intermediary mortgages are £200 more expensive each month than comparable direct products, according to research.
The latest study by Home Buyer Sourcing Index (HBSI) suggests mortgage deals available to intermediaries cost around £5,000 more over the lifetime of a product than those sold by lenders themselves.
The research suggests considerable savings can be made by borrowers if they choose the direct-to-lender equivalent.
Remortgagers at 85% LTV can save £208 per month; second time buyers at 80% LTV are better off by £201 a month, and first time buyers at 80% LTV can save £162.17 a month.
The HBSI also shows that the choice of products available via intermediaries is very limited compared with direct to lender equivalents.
For first time buyers, there are no intermediary products at 90% LTV, and the intermediary share at 85% LTV is only around 12% of the total (seven out of 60 products). For second time buyers and remortgages, there are no intermediary products at 90% LTV, and the market shares at 85% LTV are 13% and 10% respectively.
Richard Angliss, manging director of Home Buy, said: "There are differing opinions on the gap between intermediary and direct products, but no-one can argue with the statistics as revealed by the HBSI.
"Mortgage brokers exist to find the very best deal for their clients, but overwhelmingly this deal is likely to be a direct product.
"Therefore, all brokers wishing to remain in business and prosper would be well advised to use their skills and experience to research the market for their clients and generate an income stream from client fees, rather than rely on the fast-disappearing option of lender proc fees."
Partner Insight: For Blackfinch, the arrival of its IHT portfolio services was a 'natural evolution' in the group's offering and points to an established track record of returning cash to investors.
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