Mortgage broker vs lender
You’ll borrow money from a lender when you get a mortgage but, with so many options out there, choosing the right one can be a challenge. That’s where a mortgage broker comes in. They’ll help you compare your options and find a lender and mortgage product that’s right for your needs.
Let’s take a closer look at the difference between applying directly with a lender and using a mortgage broker, plus the pros and cons of each.
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Author - Aidan Darrall Editor - Stuart Bowman
Last reviewed on 22nd January 2025
Quick recap:
Mortgage brokers act as the intermediary between you and various lenders. Their role is to help you find the most suitable mortgage product and rates
Lenders, which can include banks, building societies or other financial institutions, provide the funds. You’ll repay them any money you’ve borrowed according to pre-agreed terms
It’s up to you whether to do your research yourself and apply to your chosen lender directly, or use a broker to help. However, accessing expert broker advice can save time, simplify the process and help you compare options at a glance
What’s the difference between a broker and a lender?
A broker helps you search for the best options across a number of different providers, but they don’t provide the funds themselves. A lender is the organisation that provides the funds to help you purchase your property. It’s also possible to take out a mortgage directly from them without using a broker, though you’ll only get access to that specific lender’s products.
What is a mortgage broker?
A mortgage broker or advisor’s goal is to help find the best lender and product for you. They do this by:
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Comparing. Depending on the type of broker you choose, your mortgage advisor will either search across the whole market or a select panel of lenders to find the most suitable options based on your personal circumstances.
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Advising. A broker provides a personal service. They’ll get to know you, your circumstances, the type of mortgage you want and your property preferences so they can find the best mortgage products out there. They’ll explain your options clearly so you can make an informed decision.
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Arranging. Brokers arrange the mortgage between you and your chosen lender, even completing the application on your behalf. The support doesn’t stop there. A broker will also manage communications between lots of different parties, such as your lender, solicitor and estate agents until your mortgage is finalised.
The role of a mortgage lender
A lender’s role is to provide you with the funds you need to purchase your property (alongside your deposit). You’ll then repay what you owe over the mortgage term, though most homeowners choose to remortgage after their initial fixed term period comes to an end.
Many different financial institutions offer mortgages directly, including banks, building societies, credit unions and specialist mortgage lenders. That’s a lot of options to choose from.
Applying directly with a lender works like this:
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You’ll get an agreement in principle. This gives you an idea of your eligibility and how much they think you could afford to borrow before you formally apply for a mortgage.
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If you decide to go ahead, the lender will conduct further credit checks and take a much closer look at your finances.
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Once your application is accepted, your lender will set the repayment terms and interest rate based on your individual circumstances. As each lender sets its own rates, you’ll have to apply with a few different lenders or use a mortgage broker if you want to compare your options across the market.
"Anyone who’s ever applied for a mortgage will know that the market is fast-moving and complicated… not to mention how tedious it can be researching various products by yourself. A mortgage broker can save you time and trouble, as well as providing expert, impartial financial advice to help you better understand the options on offer."
Stuart Bowman, Mortgage Expert
The big decision: should I use a mortgage broker or lender?
Whether you opt to use a mortgage broker or apply directly with a lender will largely come down to personal preference and your individual circumstances. However, there are some key pros and cons to keep in mind.
Advantages of using a mortgage broker
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Ask the experts. Brokers are qualified to offer professional, impartial advice to help you find the best options based on your individual circumstances. They will recommend applying with the most suitable lenders, saving you time and an unnecessary hard credit check applying with a lender who will be unlikely to accept you (though a hard credit check will still be performed with any full mortgage application).
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Have help along the way. Mortgage advisors are fluent in mortgage jargon, so they’ll help you get to grips with the key info you need to know. This can be particularly useful for first time buyers who might not know the ropes.
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Get access to more options. Brokers can help you compare options across the lender landscape, giving you much greater choice. In fact, you may find that some lenders or mortgage deals can only be accessed through a broker.
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Find competitive rates and terms. Brokers compare deals across different lenders to help quickly identify the best rates based on your personal circumstances.
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Save time. Don’t fancy trawling through hundreds of thousands of mortgage deals? We don’t blame you. A broker will do all that hard work, so you can get back to planning your big move.
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Support at each step. Your broker doesn’t just handle the application process. They’ll continue to support you right up until you get the keys for your new home and beyond, with many also able to advise on insurance products such as mortgage protection insurance.
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Enjoy flexibility. Some people find it harder to get accepted by lenders for loads of different reasons. You might be self-employed, have less-than-perfect credit history, a complex employment history or be looking to buy a non-standard property. A broker could help to find a suitable deal as they have a wider overview of the market, and will also give you advice on how to get your application into the best shape.
Read more about why you should use a mortgage broker.
Disadvantages to be aware of
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Fees may apply. Some brokers charge a fee for their services, which can make the cost of borrowing more expensive. That said, there are brokers out there (like us) that don’t charge the customer any fees at all. You can read more about how fee-free mortgage brokers get paid here.
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Applying through a broker might take longer. Consulting a mortgage broker could initially take a bit longer than simply submitting one application directly to a lender as your broker might need a bit of time to research the most suitable deal for you based on the lenders they have access to. We’d say that’s time well spent, though.
Advantages of going directly to a lender
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Build on existing relationships. If you already have a good relationship with your bank or building society, you may be able to score good rates by going directly.
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Access exclusives. You might only be able to access deals from some providers by applying directly.
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Submit an application sooner. Getting a mortgage directly from a bank or building society can sometimes be quicker as you’ll just have one application form to think about.
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Save on fees. You might save on broker fees by applying directly, though not all mortgage brokers charge for their services.
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More control. If you think you’ve got top notch mortgage know-how, then you might want to look after the application process yourself from start to finish.
Disadvantages to be aware of
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You could miss out on better rates. Direct lenders will only be able to offer you their own mortgage range, making it trickier to get a feel for the best rates across the market.
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Researching takes time. However financially savvy you are, researching and comparing mortgage products by yourself will take a lot of time. Many of the tools you see online won’t take into account your personal circumstances which means a lot of those promotional deals might not be right for you. A broker has a much wider overview of the market, combined with the industry expertise to help you cut through the noise and find the best deal.
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You might not qualify. Each lender has their own criteria, and applying with just one could limit your chances of acceptance if you don’t quite match what they’re looking for. A hard credit check will be left on your credit report with each full application, so be wary of applying with more than one lender at once.
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There might be less support. Applying directly to a lender might get you a mortgage deal you’re happy with, but do you have the time to manage the communication between every party in the house-buying process? A lender likely won’t get involved in liaising with third parties.
FAQs
Yes, it can be quicker to apply for a mortgage using a broker. While the application process is usually the same whether you’re applying through a broker or with a lender directly, having broker support can make all the difference.
That’s because the mortgage application process can be complicated and time-consuming to navigate yourself. Researching lenders, comparing rates and terms, submitting an application and managing the process from start to finish simply does take more time if you’re not experienced.
Fortunately, mortgage advisors really do know their stuff and can streamline the process to make it much more straightforward for you - often saving you valuable time.
Brokers compare deals across a wide range of lenders, something that would be a time-consuming task for you to do on your own. Mortgage advisors can also access exclusive broker-only deals that you wouldn’t be able to get without their help. This means you could secure a better rate when you arrange your mortgage through a broker.
Your lender will ultimately decide how much you can borrow, and will base that decision on lots of different factors including your personal circumstances and affordability.
However, while a mortgage broker won’t be able to impact how much a mortgage lender will offer you, they may be able to help you borrow more than you could secure on your own. That’s because:
Brokers have access to an extensive network of lenders and understand their criteria. Your broker will know which lenders offer the mortgage product that best suits your needs
Your mortgage advisor will assess your affordability and eligibility, then recommend a lender and mortgage product tailored to your circumstances
They’ll help you to maximise your borrowing capacity. Mortgage brokers offer advice on ways to strengthen your application, which may help you secure a larger mortgage
They have experience dealing with more complex cases. So, if you’re self-employed or have a non-standard financial situation, brokers can research lender criteria and recommend those most likely to accept your application
A mortgage in principle (MIP) can give you an initial idea of how much you could borrow. Get your MIP online for free with Mojo Mortgages.
Sam saved time with our hassle-free mortgage advice
After several weeks of trawling the comparison sites and interest rates, I filled in my details for several callbacks. I switch mortgages quite often and found it always to be a similar necessary task that eats away at your day and no one company really stands out above any other… I had a callback from Connor and I’m now going to be a customer for every future remortgage I need.
I wish I knew it was this easy last week and would have saved hours of pointless calls to scripted agents elsewhere. Amazing service.
Sam
14 October 2024
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