Your Complete Guide to Getting the Best Mortgage Deal
Buying a house is likely the biggest financial decision you’ll ever make. When it comes to securing a mortgage, you face a crucial choice: Should you use a Bank or Mortgage Broker in the UK? This decision can save you thousands of pounds and significantly affect your chances of approval.
You can take out a mortgage through a mortgage broker or directly from a bank or building society. Both routes have advantages and limitations. This guide breaks down everything you need to know to make the right choice for your circumstances.
Should You Use a Bank or Mortgage Broker in the UK
Understanding the Bank vs Mortgage Broker Debate
The fundamental difference is simple. A bank offers you mortgage products from their own internal range, meaning they’ll only show you their deals, not the whole market. A mortgage broker works across many lenders to find the best deal for your situation.
Whether you apply for a mortgage directly through your bank or choose a mortgage broker, it’s likely you’ll use a mortgage broker either way as many banks employ their own in-house brokers. The real question becomes: should you use a bank-tied broker or a whole-of-market mortgage broker?
How a Mortgage Broker Works
A mortgage broker is a financial adviser specialising in mortgages, acting as an intermediary between you and lenders. When you contact a broker, they’ll ask about your financial situation, the property you want to buy or re-mortgage, and the type of mortgage you need.
The broker then searches the market for mortgage deals that match your requirements. Mortgage brokers have relationships with different lenders and can help you access a wider range of products. They can shop around, compare different mortgages, and find the best deal for you.
Mortgage brokers often handle most of the legwork, speeding up the process by ensuring all your documentation is accurate and complete. They prepare paperwork, contact lenders, negotiate deals, and manage your application through to completion.
Many brokers have access to exclusive deals not available directly to the public. Some mortgage deals are only available directly from a bank or building society, not through a mortgage broker, while others are only available through brokers.
Do Banks or Mortgage Brokers Have Better Rates?
This is the question most homebuyers ask. The answer isn’t straightforward.
In some cases, you may get a lower interest rate or reduced fees just for being an existing customer of a bank. Some banks offer exclusive rates to their long-standing customers that you won’t find elsewhere.
However, brokers often secure better deals overall. Brokers can access exclusive or specialist rates that banks don’t offer direct. They can compare hundreds of products across dozens of lenders to find the most competitive rate for your specific circumstances.
Yorkshire Bank and First Direct don’t work with brokers, so you’ll need to apply direct. For complete market coverage, you should compare a broker’s best result with deals from these direct-only lenders.
The rate you get depends heavily on your circumstances. If you have straightforward finances, good credit, and a large deposit, both routes might offer similar rates. If your situation is complex, a broker will almost always find better options.
Why Use a Mortgage Broker Instead of a Bank
Access to the Whole Market
Mortgage brokers can access products from multiple lenders, including niche providers unavailable to the public, while banks are limited to offering their own products. This gives you significantly more choice.
Most brokers work with 30 to 90 lenders. Some have access to 100 or more. Banks can only offer their own products, which might number 10 to 20 different mortgages.
Expert Knowledge of Lender Criteria
Brokers know which lenders are flexible and which have strict criteria. They understand that Lender A might accept self-employed applicants with one year of accounts, while Lender B requires two years. They know which lenders are comfortable with certain property types, employment situations, or credit histories.
This knowledge prevents wasted applications. Each mortgage application you make is recorded on your credit file. Multiple rejections can damage your credit score and make it harder to get approved later.
Time Saving
Mortgage brokers can do the legwork on your behalf, including gathering and preparing all the necessary paperwork, shopping around, comparing deals, contacting lenders and negotiating better deals for you.
Instead of spending hours researching lenders, comparing products, and making multiple applications, you explain your situation once to a broker. They handle everything else.
Help with Complex Circumstances
Circumstances like bad credit history or non-standard income often call for a specialist mortgage lender, and you’ll need a broker to find the right one.
If you’re self-employed, have irregular income, own a non-standard property, have bad credit, or fall into any higher-risk category, brokers are essential. They know which specialist lenders will consider your application.
Better Chance of Approval
Brokers can compare multiple lender criteria with your application and see if you can get approved even before submitting your application, which can save you time in the application process and help you avoid applications that will likely get rejected.
This pre-screening protects your credit score and prevents the frustration of repeated rejections.
The Cost of a Mortgage Broker
Understanding broker fees helps you budget properly and choose the right broker.
Average Mortgage Broker Fees
The average mortgage broker fee in the UK is £500. However, fees vary significantly based on location, complexity, and the broker’s fee structure.
In 2025, mortgage broker fees in the UK typically range from £0 to £995. Fees depend on your circumstances, the complexity of the mortgage, and whether the broker charges a flat fee, a percentage, or nothing at all.
Always best to ask before they become involved in your application – The good ones will be upfront and tell you exactly how much they will charge, and confirm with you that you are happy and wish to proceed.
Fee Structures Explained
Brokers use three main charging methods:
Fixed Fee: Many Advisors request an upfront fee before (Or during) the beginning their search for suitable lenders, this is often between £300 and £600, though it can be higher or lower in some cases. You pay a set amount regardless of your mortgage size.
Percentage-Based Fee: Those who charge in this way use the typical mortgage broker fees, that range from 0.35% to 1% of your mortgage loan amount. On a £200,000 mortgage, a 0.4% fee would cost you £800.
Fee-Free (Commission Only): Approximately 59% of mortgage brokers charge fees to their clients, while the remaining 41% operate on a fee-free basis, earning solely through commissions from lenders.
Most mortgage lenders will pay brokers a commission, or procuration fee, of about 0.35% of the loan size. On a £100,000 mortgage, typical commission would be £350. You don’t pay this, and it doesn’t affect your costs.
Remember; most Mortgage Brokers will work very hard to obtain your mortgage offer for you, often spending hours and hours over days or weeks to achieve the aim. Your application may not be as simple as you may think, and they generally do a huge amount of work behind the scenes for your sole benefit.
Are Broker Fees Worth It?
A mortgage broker’s fee can be made back quickly if your deal is even slightly better than the next best offer available. Even a 0.1% improvement in your interest rate can save you thousands over your mortgage term.
For example, on a £150,000 mortgage at 5% over 25 years, you’d repay £263,162 total. At 4.9%, you’d repay £260,411, saving £2,751. After paying a £500 broker fee, you still save £2,251.
Advantages of Using a Bank Directly
Banks aren’t without benefits. Understanding when to go direct helps you make informed choices.
No Broker Fees
Banks tend to have no broker fees, which makes them cost-effective, at least on the surface. You avoid the upfront cost of broker fees.
Existing Customer Benefits
If you’ve banked with the same institution for years, they may offer exclusive rates or preferential terms. Some banks provide rate discounts to existing current account holders.
Simpler for Straightforward Cases
Banks can provide streamlined communication for customers who already have accounts with the bank and potentially faster processing times for applications due to already-established relationships.
If you have excellent credit, stable employment, a large deposit, and want a straightforward repayment mortgage on a standard property, going direct might work fine.
Face-to-Face Service
High street banks offer in-person meetings if you prefer discussing finances face-to-face rather than over the phone or online.
Disadvantages of Using a Bank Directly
The limitations of going direct can be significant.
Limited Product Range
Banks are limited to offering their own products, which can reduce variety but simplify decision-making. You only see 10 to 20 mortgages instead of hundreds available across the market.
May Miss Better Deals
Your bank might not offer the most competitive rate for your circumstances. Without comparing the whole market, you won’t know if you’re getting the best deal.
Less Help with Complex Cases
Most banks have strict criteria and may reject applications that don’t fit a perfect mould. If your situation is even slightly unusual, you might get rejected without explanation or alternatives.
More Work for You
You handle all the research, paperwork, and legwork yourself. This takes significant time and effort, particularly if you’re comparing multiple banks.
Questions to Ask a Mortgage Broker
Asking the right questions helps you find the best broker and understand what you’re getting.
Is Your Broker FCA Regulated?
All mortgage brokers in the UK should be regulated by the Financial Conduct Authority. Check the FCA register before working with any broker. Only regulated brokers give you access to the Financial Ombudsman Service if something goes wrong.
Are You Whole-of-Market or Restricted?
Some brokers are tied to a specific lender, some look at deals from a limited list of preferred lenders, and some check the whole market for the most comprehensive range of products.
Whole-of-market brokers access more lenders and products. Restricted brokers may offer lower fees but less choice.
How Much Do You Charge?
Mortgage brokers may charge in different ways: some are fee-free and earn a commission from the lender, usually around 0.35% to 0.4% of the loan amount, while others charge an upfront fee, typically around £500 or a percentage of the mortgage loan such as 0.5% to 1%.
Get this in writing upfront. Ask whether the fee is refundable if your mortgage doesn’t complete.
How Much Can I Borrow?
The amount you can borrow on a mortgage will depend on a number of factors, not just your income. The mortgage adviser will run through an affordability questionnaire that asks questions about your employment, income, amount of credit you currently have, your credit score and your credit history.
A good broker provides realistic figures based on your circumstances before you start house hunting.
What Type of Mortgage Is Best for Me?
Ask about fixed-rate, variable-rate, tracker, and offset mortgages. A trusted broker will explain more than just the pros and cons of each mortgage type; they will be able to tailor a mortgage product to your specific requirements.
What Documents Will I Need?
Understanding documentation requirements early prevents delays. Typically you’ll need proof of ID, proof of address, three months of bank statements, payslips or accounts, and proof of deposit.
How Long Will the Process Take?
Ask about realistic timelines from application to completion. Standard cases take 8 to 12 weeks. Complex cases can take longer.
Who Will Be My Point of Contact?
Some broker firms will have a team of brokers all involved in processing your application, while others assign a dedicated mortgage broker who will be responsible for your case from your first enquiry through to completion.
Clarify who you’ll be speaking to at each stage and what the expected response time is for queries.
What Happens If My Application Is Rejected?
Ask whether the broker will continue working to find alternatives if your first application fails. Good brokers don’t give up after one rejection.
Will You Help After Completion?
Some brokers offer ongoing service, checking in when your deal expires to help you avoid slipping onto higher standard variable rates.
Bad Credit Mortgage Broker: When You Need Specialist Help
If you have bad credit, specialist brokers become essential rather than optional.
Why Bad Credit Makes Direct Applications Risky
Applying for a mortgage with bad credit is tricky business. If your mortgage application is rejected, this can act as a red flag to other lenders. Multiple rejections severely damage your credit score.
Never apply for a mortgage without checking your eligibility for the agreement, as a rejection for a mortgage can stay on your credit report for up to six years.
What Bad Credit Mortgage Brokers Do Differently
Bad credit mortgage brokers complete a manual process that looks at various aspects of a person’s financial circumstances, including an assessment of the borrower’s income and expenditure, proof of outgoings and income, and looking at the reasons as to why the applicant fell into bad credit.
They understand which lenders are flexible about specific issues. Some lenders accept CCJs but not defaults. Others accept bankruptcy after a certain time period. Brokers match your specific situation to appropriate lenders.
Types of Bad Credit Accepted
Specialist bad credit mortgage brokers help with:
- Missed or late payments on credit cards or loans
- Defaults on credit agreements
- County Court Judgements (CCJs)
- Individual Voluntary Arrangements (IVAs)
- Debt Management Plans (DMPs)
- Bankruptcy or repossession history
- Low credit scores from limited credit history
Higher Deposits and Rates
Bad credit mortgages tend to require a higher mortgage deposit, typically 15% compared to 5% to 10% on a normal mortgage. You’re also likely to see higher fees and interest rates on this type of mortgage.
Understanding these requirements upfront helps you set realistic expectations and save an appropriate deposit.
How to Find a Mortgage Broker Online
Finding the right broker online requires knowing where to look and what to check.
Use Comparison and Matching Services
Services like Unbiased, VouchedFor, and Money Saving Expert connect you with FCA-regulated brokers. These platforms pre-vet brokers and match you based on your circumstances.
Check Reviews and Ratings
Look for brokers with strong Trustpilot ratings (4.5 stars or higher) based on hundreds or thousands of reviews. Read recent reviews to understand current service levels.
Verify FCA Registration
Always check the FCA register at register.fca.org.uk before working with any broker. Verify they’re authorised to give mortgage advice.
Look for Relevant Qualifications
Any individual that wants to operate as a mortgage broker in the UK must successfully complete a Certificate in Mortgage Advice and Practice (CeMAP) course or equivalent by the FCA.
Consider Specialisms
If you have specific needs (self-employed, bad credit, buy-to-let, first-time buyer), look for brokers specialising in your area. Specialists understand the nuances of complex cases.
Ask About Technology
Modern brokers use online portals where you can track your application progress, upload documents, and communicate with your advisor. This makes the process more convenient than traditional phone and post methods.
Bank or Mortgage Broker: Making Your Decision
Your choice depends on your specific circumstances.
Use a Bank If:
- You have excellent credit and straightforward finances
- You want a simple repayment mortgage on a standard property
- Your bank offers exclusive rates significantly better than market alternatives
- You strongly prefer face-to-face service at a local branch
- You’re confident researching and comparing products yourself
Use a Mortgage Broker If:
- You want access to the whole market
- You have any complications (self-employed, bad credit, non-standard property)
- You value expert guidance through the process
- You want someone to handle paperwork and negotiations
- You’re a first-time buyer unfamiliar with the mortgage process
- Time is limited and you can’t research extensively yourself
Unless you’re a mortgage expert, consulting an independent and qualified mortgage broker is better than going directly to the bank. They can help you save time and money while preventing damage to your credit report.
The Hybrid Approach: Using Both
There’s no restriction on exploring both routes. In fact, comparing offers from a broker and your own bank can give you a clearer picture of the market.
Get a mortgage in principle from your bank. Then consult a broker and compare what they find. This ensures you’re not missing better deals. Just don’t submit multiple formal applications, as each one affects your credit score.
Your Next Steps
Start by assessing your circumstances honestly. Do you have excellent credit or any issues? Are you employed in a standard job or self-employed? Is your deposit 5%, 15%, or 30%?
If anything about your situation is non-standard, contact a whole-of-market mortgage broker. Get fee structures in writing and ask all the questions listed above.
If everything is straightforward, check your bank’s rates first. Then speak to at least one broker to compare. The time invested in comparison often saves thousands of pounds.
Remember that the cheapest option isn’t always the best. Consider the total cost over your mortgage term, the quality of service, and the likelihood of approval. A slightly higher upfront broker fee that secures a better rate and smoother process often proves worthwhile.
The UK mortgage market is complex and constantly changing. Having expert guidance typically outweighs the cost of fees. Most homebuyers who use brokers report less stress, faster completion times, and confidence they’ve secured the best deal for their circumstances.