Thousands of borrowers are missing out on better deals by not speaking to a mortgage adviser, according to new research.
Legal & General Mortgage Club surveyed more than 2,000 homeowners and found that more than two thirds of borrowers who initially went straight to a lender had not remortgaged in the past five years.
On top of this, 74 per cent of borrowers said they stayed put with their current mortgage policy because they felt they had a ‘good deal’ and nearly a third of consumers who went direct to a lender didn’t understand how a mortgage adviser could help with their search.
According to L&G Mortgage Club, these individuals would have missed out on thousands of mortgage deals available through a mortgage adviser.
Data from mortgage sourcing platform Twenty7Tec, gathered in April, backs this up.
It showed that almost 12,000 mortgages were available through mortgage advisers, compared to about 2,000 directly on offer from lenders to consumers.
L&G Mortgage Club’s research also showed that the mortgage industry needed to demonstrate the value of mortgage advice for borrowers.
Just 30 per cent of those who went direct to the lender said they would speak to a mortgage adviser next time.
Of those polled three in every five who didn’t seek advice when they took out their last mortgage didn’t know mortgage advisers were there to help the borrower, and just over a third thought a mortgage adviser was there to support the lender.
Almost a third (29 per cent) of homeowners who had advice when searching the market for the best mortgage deal were likely to have switched in the last five years, compared to just one in five (19 per cent) of those who went direct.
According to the club, these borrowers would have benefitted from opportunities to pay less interest as rates on mortgages fell, with the average rate on a two-year fixed term mortgage falling from 2.6 per cent in June 2014 to 1.48 per cent in June 2017.
Borrowers who used a mortgage adviser were also overwhelmingly in favour of using one again.
Nearly all (98 per cent) said that they found the support of a mortgage adviser ‘valuable’ and a further 95 per cent said they would recommend using a mortgage adviser to family or friends.
Kevin Roberts, director at Legal & General Mortgage Club, said: "Whether someone is taking out their very first mortgage or unlocking housing wealth in retirement, the value that mortgage advisers can bring to borrowers can make a huge difference when it comes to moving onto and up the property ladder.
"Yet, our research shows that potentially thousands of borrowers still don’t know how a mortgage adviser can help with their mortgage search and as a result they could be missing out on a better deal."
Mr Roberts went on to say that buying a home was one of the biggest purchases an individual would make in their lifetime and stressed it was vital for buyers to speak to an adviser who could help them understand their own borrowing needs.