Mortgage advice – Should you use a mortgage adviser?
Caz Blake-Symes • May 28, 2020
Guidance from The Money Advice Service
Adapted from an article by moneyadviceservice.org.uk
Getting a mortgage is one of the biggest financial decisions you will make, so it is important to get it right. This article will help you work out whether you should get a mortgage adviser, where to get free advice, how your bank might be able to help and which comparison websites you can check.
How to choose a mortgage
The mortgage market is incredibly competitive, and it can be hard to understand what exactly is on offer. There are many different providers and a wide range of products and rates available.
So, it is a good idea to talk to your bank, as well as a number of independent mortgage advisors, before making up your mind. This guide will take you through the routes to getting a mortgage and the importance of studying your options before making a decision.
Why it is usually a good idea to get mortgage advice
Lenders (usually banks) and brokers must offer advice when they recommend a mortgage for you.
They will assess the level of mortgage repayments you can afford, by looking at your income as well as your debt repayments and day-to-day spending.
This means you should end up with a mortgage that suits your needs. Although lenders and brokers must offer advice in almost all cases, you might be able choose to reject the advice and find your own mortgage deal based on your own research. If you choose your own mortgage without advice, it’s called an “execution-only” application.
Risks of not getting advice
Getting advice, rather than doing research on your own, means that if the mortgage turns out to be unsuitable for you later on, you’ll have more rights when you make a complaint.
For example, you could make a complaint of financial mis-selling if the advice you were given turned out to be unsuitable for you. Not taking any advice means you have to take full responsibility for your mortgage decision.
If you don’t take advice, you could end up:
- With the wrong mortgage for your situation, which would be a costly mistake in the long run.
- Being rejected by your chosen lender, because you didn’t understand the restrictions clearly or what circumstances the mortgage was designed for.
When to see a mortgage adviser
A mortgage adviser, also known as an independent mortgage broker, is a specialist with in-depth knowledge of the market.
They can look at a range of mortgage products which suit your needs. It is a good idea to speak to a few of them to see what is on offer.
There are three main types of mortgage adviser:
- Some are tied to a specific lender
- Some loo k at deals from a limited list of lenders, and
- Some check the whole market for a wide range of products
Even ‘whole of market’ advisers do not cover everything.
They cannot advise you on mortgages that are only available if you go to the lender directly. All mortgage advisers must offer you advice when recommending the most suitable mortgage for you. This means you are protected and you can complain to the Financial Ombudsman if things go wrong.
Other reasons to use an adviser
- They will check your finances to make sure you can afford a mortgage
- They might have exclusive deals with lenders, not otherwise available
- They often complete the paperwork for you, so your application should be dealt with faster
- They will help you take all the costs and features of the mortgage into account, beyond the interest rate
- They should only recommend a mortgage that is suitable for you and will tell you which ones you are likely to get
Fees
Mortgage brokers might charge you for their service depending on the product you choose or the value of the mortgage.
Others will be free to you, but they will receive commission from the lender. They should tell you up-front how much you will pay for their services. You should also be told if an adviser is paid commission. Once your broker makes a product recommendation, they must give you a mortgage illustration document(s). This document is usually called a keyfacts illustration.
What to look for in a mortgage
It is also important to do some research into the type of product and features you need before making a purchase or changing supplier.
There are other factors, which also contribute to the whole amount you pay back over time.
Look out for:
- APRC: (Annual Percentage Rate of Change) takes some mortgage fees into account as well as the interest rate and expresses it as a percentage.
- Deposit size: the higher the deposit, the lower the interest rate you are likely to get
- The standard rate: which your mortgage will switch to once your fixed rate deal ends.
- How often is interest charged? will it be paid daily, monthly, or annually? Daily interest works out cheaper.
- Flexibility: can you overpay your mortgage without being charged and can you take a break from making payments?
- Length of fixed or variable rate deal: do you want to be locked in for a long period. or have more flexibility? There will be charges if you switch out of a deal before it ends.
For further details about the service we offer as a fully independent mortgage brokers or any other mortgage information book your FREE CONSULTATION with one of our expert Mortgage Advisers please contact us
Bristol Mortgages Online www.bristolmortgagesonline.com
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Adapted from Zoopla’s April 2025 Housing report I mage: The analysis uses average house prices from the house price index and for first-time buyers to assess mortgage payments at different mortgage rates applied to a 30- year mortgage, at different loan-to-values. One emerging trend that we expect to positively support market activity in the coming months is a relaxation in how lenders assess the affordability of new mortgages. While buyers focus on the mortgage rate they will pay, lenders also check whether the borrower can afford a 'stressed mortgage rate' at a higher level than the borrower will pay. While the average 5-year fixed rate mortgage is around 4.5% today, many lenders are currently 'stress testing' affordability at 8-9%. This makes it harder to secure a mortgage without a large deposit. If average mortgage stress rates were to return to pre-2022 levels of 6.5% to 7%, this would deliver a 15-20% boost to buying power. An average first-time buyer with mortgage repayments of £1,020pcm at a 4.5% mortgage rate would typically have to prove they could afford monthly repayments of £1,550pcm at an 8.5% stress rate. If the stress testing is relaxed to 6.5%, repayments would fall to £1,275pcm, boosting buying power. It's a similar pattern for the average homeowner, while the actual impact will vary by lender and type of borrower. This change would consequently supporting demand and sales volumes, helping to clear the stock of homes for sale, rather than boosting house prices. Other existing rules and regulations that remain in place will continue to impact the availability of mortgage finance. Comment from Phil Clark “This is potentially very exciting news and will give borrowers a greater choice of products if these rules are relaxed. Regardless of whether you are a First-time Buyer, Looking to move, remortgage or invest in property, there are a huge range of competitive mortgage deals on the market. I will be delighted to discuss your specific requirements and offer you the most suitable deal!” Please call Phil on 0117 3251511 or email info@swmortgages.com For more information about the Mortgage and Protection products we offer, please visit www.bristolmortgagesonline.com Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
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Adapted from BBC Article by Kevin Peachey, Cost of living correspondent 13 February 2025 Two major lenders launched mortgage deals on Thursday with interest rates of less than 4%, as competition picks up in the sector. The prospect of further cuts in the base rate by the Bank of England has given mortgage providers confidence to reduce their own rates. But the attention-grabbing sub-4% deals by Santander and Barclays will not be available to all borrowers, particularly first-time buyers, and may come with a hefty fee. The return of such deals might prompt other lenders to follow suit after a period of tepid competition. Nationwide, the UK's biggest building society, has said it will reduce some of its rates on Friday. Mortgage deals with interest rates below 4% have not been seen since November. Across the whole market the average rate on a two-year fixed deal is 5.48%. The typical rate on five-year deals is 5.29%, according to latest figures from Moneyfacts. Time to decide Some tracker and variable rate mortgages move fairly closely in line with the Bank's base rate, which was cut to 4.5% a week ago. However, more than eight in 10 mortgage customers have fixed-rate deals. The interest rate on this kind of mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it. About 800,000 fixed-rate mortgages, currently with an interest rate of 3% or below, are expected to expire every year, on average, until the end of 2027. That means a higher monthly bill for many homeowners on their next renewal, but there are signs that the rate they could pay is on its way down. Bank of England governor Andrew Bailey said the interest-rate setting committee expected to be able to cut rates further "but we will have to judge meeting by meeting, how far and how fast". This will affect savers who are seeing lower returns, but could bring better news for borrowers. The Bank's next rates decision is on 20 March. Message from Phil Clark “Regardless of whether you are a First-time Buyer, Looking to move, remortgage or invest in property, there are a huge range of competitive mortgage deals on the market. I will be delighted to discuss your specific requirements and offer you the most suitable deal!” Please call Phil on 0117 3251511 or email info@swmortgages.com For more information about Mortgage and Protection please visit www.bristolmortgagesonline.com