Lender Dual pricing: what it means to the mortgage seeker

First, let’s look at exactly what dual pricing is.

Dual pricing is where lenders offer a different set of rates to those going direct rather than through a broker. Although many lenders have abolished this practice, it has become more common recently. Today, around 70% of mortgage applications are made through brokers.

Using a broker like us means we package your application, as well as giving you the best advice for your circumstances. We realise you may think that we would say it’s better to use a broker; it actually really is. Here’s why…

With less than a third of potential clients now going directly to lenders, many banks and building societies have cut advice out and reduced their administration staff, often leaving clients open to simply using online portals and aggregators. In theory, you may think this is sound, though it’s not quite that simple.

Sometimes, direct deals are more expensive, and lenders simply roll with this, presumably on the basis that if they’re not being questioned, there’s no need to explain. It’s about profit for them.

We are not aware of any disclaimers or indication on lender websites that the client might not be being shown the full picture, therefore you could easily assume these are all the products available from that institution.

It could work for anyone well versed in applying for mortgages. However, if there is little or no indication to the end user that these rates do not represent the wider market then, for most people, they will not necessarily know exactly what is out there. A good broker knows exactly what is out there, therefore, in order to be fully informed of the choices available, and which ones best suit your circumstances, you have to use a broker.

Is there a duty of care for lenders to point this information out to the public? That is not for us to say. What we can tell you is that, here at Euxton Mortgage Market, we search the market and provide bespoke solutions after taking your individual circumstances into account; and we do this all without charging a fee.

March 2020