Why you can't trust your bank for mortgage advice

You're ready to buy a house and now need a mortgage. It's just a case of popping into your bank and seeing what they've got, right? Here's why that's a bad idea.
Share this guide
Women meeting bank manager

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

They aren't whole of market

If you go to your bank or building society, they usually only offer you their own mortgages.

There are hundreds of mortgages available in the UK, so only looking at deals from one lender means it's very unlikely you'll end up with the cheapest option.

On top of that, many lenders don't offer every type of mortgage, so you might not be able to get one that suits what you need.

For example: a fixed rate mortgage won't change its interest for a while, usually several years. Until then, your monthly payments won't go up, which might be the best fit for your finances.

If your bank doesn't offer you a fixed rate mortgage, you'll end up with one that could get more expensive at any time. However, a different lender might be able to offer you fixed mortgage.

How to work out what type of mortgage is right for you

Long waits

Banks can now only sell you a mortgage if a qualified expert assesses your financial circumstances to make sure you can afford it.

The upside is that you are more likely to get a mortgage that suits you and help from someone who knows what they're talking about. But it also means the wait for a mortgage appointment can now be much longer.

This means you can sometimes have to wait weeks for an appointment — unhelpful if you've already found a house and need a mortgage as soon as possible.

Advantages of using your bank

Going straight to your bank can offer benefits for some people:

  • Preferential rates: Some banks offer their best interest rates to customers who already have a current or savings account with them.

  • Free advice: Banks usually don't charge for mortgage advice, so you can speak to a qualified expert about what you need for free.

  • Talk to someone in person: If you're buying for the first time or just want to talk through your options, going into a branch can be easier than finding a mortgage online yourself or talking to a broker by phone.

  • Familiarity: Applying for a mortgage can be less daunting if the staff at your bank know you and your finances already.

  • Customer service: You already know how well your bank treat their customers and how easy it is to get hold of them if you need help.

  • Manage your mortgage in the branch: If you need to make changes to your mortgage or get help once you've taken it out, having a branch nearby can be useful.

How else can you find a mortgage?

Choose one online yourself

This is worth trying if you know what kind of mortgage you want and understand how they work and how much they cost.

If you find a mortgage yourself, you don't need to pay for advice and you can use our comparison to choose from all mortgage deals available in the UK.

If you want to make sure you've found the best deal, ask a broker if they can find anything better.

They may be able to find a mortgage that works out cheaper even including their fees. If not, just apply for the one you found instead.

Find out everything you need to know by reading our mortgage guides

Should you use a broker or find a mortgage by yourself?

Use a broker for help

Mortgage brokers can give you advice when you get a mortgage and recommend which to apply for. They may offer mortgages from:

  • The whole market: Every mortgage available (except ones you can only apply for directly)

  • A panel of lenders: They only offer mortgages from a few selected lenders

  • Just one lender: They can offer advice but don't include mortgages from other providers

Some brokers also have exclusive deals you can only get through them and not directly from the lender.

They can help you with the application process too, including dealing with the mortgage lender and dealing with any problems that crop up.

You can contact a mortgage broker here

Do you even need advice when you get a mortgage?

Talking to a mortgage expert can help you get:

  • A mortgage you're eligible for, because they know which lenders are more likely to accept you. This is especially useful if you may struggle to find a mortgage, e.g. if you have bad credit or are over 60.

  • A mortgage you can afford, because they have to check your finances to make sure the monthly payments aren't too much for your budget.

  • Help with the paperwork, which makes it easier to complete and more likely there will be no errors or mistakes that can delay or even invalidate your application.

  • A cheaper deal, because they can help you work out the full cost of each mortgage, including the monthly payments and all the fees for taking it out. Getting the best deal could save you thousands of pounds.

Even if you have to pay for this, it can save you much more money than the advice cost. But this doesn't mean you always have to pay for mortgage advice.

If you're a first time buyer or looking to move house or remortgage, we can help you find the best mortgage deal to suit your needs.

About Dan Base

View Dan Base's full biography here or visit the money.co.uk press centre for our latest news.