Can mortgage brokers negotiate better deal for the same product?

Discussion in 'Loans & Mortgage Brokers' started by property_geek, 13th Feb, 2020.

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  1. property_geek

    property_geek Well-Known Member

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    Do mortgage brokers have extra negotiating powers?

    For a new purchase or refinance, can a mortgage broker arrange a better deal (lower interest or more cashback) compared to what is advertised on lender's website?

    I understand there are clear cut advantages for engaging a mortgage broker. For example, a MB can present the application in more organized way for better chances of approval or help you chose a more suitable product. However, my question is specific to a chosen product from a chosen lender.

    I have lenders calling me directly (because I filled out callback forms on lender's website) who are offering me what is already advertised on their website. Basically no discount on what is advertised.

    If I engage a MB, can they negotiate with same lender for same product and get me better deal( lower rate or more cashback than what is advertised)?

    Are there any lenders that are open to negotiations (from what is advertised)? if yes, who are they and do they negotiate with clients and MB both or just MBs?

    Please note, this question is about refinance/new purchase only (not about negotiating lower rate on existing mortgage with existing lender).
     
  2. Trainee

    Trainee Well-Known Member

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    Lender offers by email etc dont mean a lot. You need to do a full app and get a formal approval. But do that a few times and your credit file is wolverined.
     
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

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    Depends on the lender but yes
     
  4. property_geek

    property_geek Well-Known Member

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    Thanks @Terry_w. Can you name a few lenders?
     
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

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    most
     
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  6. Brady

    Brady Well-Known Member

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    I would say most would be able to get better than advertised.
    Just like most bankers direct would be able to offer better than advertised.
    Wouldn't work for all banks and products.
     
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  7. Lindsay_W

    Lindsay_W Well-Known Member

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    More cashback? = No
    Lower Rate? = Yes
     
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  8. Redom

    Redom Finance Strategist Business Member

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    Than advertised rates - yes, brokers will do much better than this usually with most lenders, particularly for variable products.

    Then rates that a good banker from that bank give you - probably not. Plenty of direct channel bankers are great. The general principle banks have is to have no channel conflict, and includes having the same rate offers direct vs brokers.

    If price is the only thing you're after, a brokers value proposition generally isn't as good as it can be.
     
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  9. Pash81

    Pash81 Well-Known Member

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    spot on
     
  10. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    I wouldn't say that I can get a better deal for you with a lender, but I go regularly get a better deal than what people get when they negotiate directly with the bank. Either way you can potentially get the same deal, but a good broker is more likely to know what to ask for and when to push for more.

    It's certainly been my observation that some bankers do this also. But if you're trying to renegotiate your rates via the call centre, you'll probably get an improvement, but not as good as you might otherwise get.
     
    Last edited: 13th Feb, 2020
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  11. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Principle of competition on the basis of the broker being the agent for the borrower - makes sense.

    In reality, most but not all lenders have the same floor, it just depends on how one gets there.

    When a broker chases retention pricing, the lender often assumes the borrower cant move. Typically our clients get slightly better results with taking our comp data to a retention team than us doing it.

    Why ? Because the lender can more clearly see a risk to the business when the incumbent borrower says, my broker wants to move me, but id like to be loyal..............

    When the broker makes the same call, it doesnt have the same pull, because if the client could move, there is usually less benefit for the borrower to be retained - I say usually, because moving isnt just about the new comms generated but another subset of non financial issues.


    ta

    rolf