Page last updated at 09:21 GMT, Tuesday, 6 May 2008 10:21 UK

Brokers challenge mortgage deals

Estate agent's window
New mortgage deals come and go at bewildering speed

Mortgage brokers are complaining of not being allowed to offer some new mortgage deals to potential borrowers.

Brokers deal with more than half of all new mortgage applications, but some lenders are offering new deals only to customers who apply to them directly.

The Association of Mortgage Intermediaries (AMI) has complained to the Financial Services Authority (FSA).

But the FSA said a refusal to offer deals via a broker was not necessarily against the customer's best interests.

"It is a commercial decision for a lender whether they want to offer products directly to the public or via a broker," said an FSA spokeswoman.

"Anyone dealing with consumers should ensure that consumers are treated fairly."


The complexity of many mortgage deals leads many borrowers to ask for advice from a mortgage broker, who earns commission from the lender on each application that is processed.

But the turmoil in the mortgage market in the past few months has seen many deals being withdrawn soon after being launched.

One reason is that banks and building societies have had to revamp their home loans in response to frequent changes in the availability of funds on the wholesale financial markets.

And in some cases, they have had to close their offers altogether after being swamped by potential customers looking to move their expiring mortgage deals to new lenders.

However, another method of rationing the deals has been to cut out brokers altogether and to offer some home loans to direct applicants only.

Last month, the Nationwide decided that first-time buyers could receive rebates on its normal application fees only if they took certain tracker and fixed-rate deals directly.

The Halifax and the Cheltenham & Gloucester are both charging up to 0.6% more on their interest rates when a broker handles the customer's application.

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