Independent or whole of the market mortgage broker?

Independent or whole of the market is a question which UK mortgage advisers had to ask themselves in light of the FSA’s new regulation of the mortgage industry in October 2004. 

There are now basically 3 types of mortgage broker: those that advise from the whole of the market, those that deal with a limited amount of mortgage lenders, ie a ‘panel’, and those that are tied to one mortgage lender. 

Whole of the market
A mortgage broker who deals with a panel can still claim to be whole of the market, so long as its panel is representative of the market.  Ideally, in order to benefit from the multitude of lenders and mortgages available, a borrower will want to be in the position of receiving mortgage advice that truly is from the whole of the market.

If in doubt about what is meant by the whole of the market, simply ask whether your adviser has access to every lender’s mortgages.  At L&C, the answer to this is ‘yes’.

Independent
Under the new regulations, to call itself ‘independent’ a mortgage broker must offer mortgage advice from the whole of the market or a panel that represents the market, plus it must offer customers a choice of how to pay for the service. 

Thus a whole of the market no-fee mortgage broker such as L&C is no longer classed as ‘independent’, whereas a fee-charging mortgage broker that deals with a panel is ‘independent’, a situation which some have criticised for being confusing.  However, the new regulations are intended to make mortgage advice clearer for the borrower.  Hence the ‘Initial Disclosure Document’ which all mortgage advisers must produce, setting out precisely what is being offered. 

So where does that leave you?
Whilst panels of mortgage lenders are representative of the market, the only way to ensure that you have access to every mortgage available is to consult a mortgage broker that deals with every lender.  To ensure further value for money, you may well want to avoid paying a broker fee for the mortgage advice given. 

At L&C, we can offer you fees-free expert mortgage advice from the whole of the market.

See also free mortgage advice: our no broker fee policy

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