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Brokers - talk to me about product choice

Journalist: John Fitzsimons, Freelance

ended 21. November 2023

Hello brokers

Data from Moneyfacts out this week found that the number of mortgage products on offer has hit its highest level in 15 years https://www.mortgagesolutions.co.uk/news/2023/11/17/market-sees-largest-choice-of-mortgage-products-for-15-years-moneyfacts/

So we'd love to get your thoughts on the importance of product choice:

  • How important is it to have this many products available?
  • Does there come a point where increases in quantity don't make much difference to the quality of the products on offer?
  • Which areas are suffering from a lack of product choice for particular types of borrowers? 
  • Are lenders sufficiently aware of the areas where there is an undersupply?

16 responses from the Newspage community

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Justin Moy
Managing Director at EHF Mortgages
The more choices with have as brokers, potentially the more people we can help and competition does drive down the cost of borrowing too. Whilst the products will all have very similar characteristics, what does make a difference are the nuances in lending policy between the mortgage lenders, how income is presented, affordability assessments, credit files, etc. More lenders in each of the market areas is actually more beneficial, but if they all bring extra products then we do have more opportunities to assist. I don't think we will ever suffer from too many products as most brokers use sourcing systems to pinpoint the right advice, we never review the thousands of products individually, just those in scope when required.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
Love a bit of competition, and this is what we are getting now, with more and more lenders launching products. This helps to drive pricing down but it is innovation, affordability and criteria that win business. Hopefully, we will see a great deal more thought go into lenders products than just pricing.
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Aaron Strutt
Product and Communications Director at Trinity Financial
Many lenders offer far more products than they used to and often have first-time buyer rates, purchase rates and then separate remortgage rates plus a whole range of fee options. Lots of lenders do not even publish their existing customer deals anymore. Each product is counted as a rate, hence why we have so many mortgages available.
It is good to have product choice, but ultimately, we need more sub-5% rates and ideally, the lenders best buy deals getting closer to 4%.
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Darryl Dhoffer
Founder at The Mortgage Geezer

It is important to have as many different types of mortgage products available as possible. This is because there is a wide variety of borrowers with different needs, and one product is not going to be the best fit for everyone.
Having a variety of products available can drive competition among lenders, which can lead to lower interest rates and better terms for borrowers.
There indeed comes a point where increases in quantity do not make much difference to the quality of the products on offer. This is because lenders will eventually become saturated with the market and will not be able to offer new products that are significantly different from existing products. We need more product offerings set as a standard from the Big 6 lenders - First Time Buyers with low credit scores or no credit history - offering cascade products for borrowers with adverse credit history - and Self Employed mortgages with 1-year trading history.
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Michelle Lawson
Director at Lawson Financial
There are lots of products available now which is great for choice however we still need more innovation. With Scottish Widows exiting the market of offset there is a real lack of lenders in this arena. Offset has a massive potential market and a missed opportunity for well run options.
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Jamie Alexander
Mortgage Director at Alexander Southwell Mortgages
Having a wide range of mortgage products seems beneficial, as it caters to the varied needs of different borrowers. However, it's not just the quantity of these products that's important, but the differences in their lending criteria that count.

Today, consumers have access to a significantly larger pool of lenders and mortgage products than they did 10 years ago, particularly in the adverse credit sector, which has expanded due to the challenging conditions in the broader economy.

Generally, I think that this increase is a positive development. However, it demands that Mortgage Advisers stay sharp and informed.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
The more options we have, generally, the better the outcomes for clients. As the market becomes more competitive lenders need to be more creative, especially those smaller lenders who can't compete with the big guns on rate alone. This leads to a more and more diverse market and product ranges; such as the recent jump in the number of 3-year fixed rates available. Lenders may also look at more LTV bands, allowing finer pricing, by having deals at 50% LTV, as well as 60% and 65%. Other lenders have looked at carving out sections of the market and offering different deals for that group, such as a professional product range, near-prime deals, or green deals.
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James Bull
Mortgage Broker at JB Mortgages
Its great to see such a large number of products available in the marketplace. Lender criteria varies massively so a large number of products available means that as a mortgage broker we are going to be able to help more people with a wide variety of circumstances.
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Richard Thompson
Director at Abbeydale Mortgages
I feel it is very important to have a wide choice of products as many customers circumstances are different and therefore having a large choice can only be good for customers. This also brings competition in the market and helps bring interest rates lower.

I would like to see the reintroduction of fixed-rate mortgage deals with shorter early repayment charge periods than the fixed rate term. I believe that providing both stability and flexibility will benefit borrowers. This will offer customers peace of mind with fixed rates and the option to secure lower rates in the future without incurring hefty charges.
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Charles Breen
Founder at C B
For consumers the more choice available is always a good thing, it gives them more options and at the end of the day that is the most important thing. With the current rate war being waged by lenders to gain a greater slice of market share they are broadening their scope, loosening criteria a bit, so its not just a greater range of products at different price but an opening up of the market.
This should be music to peoples ears especially as over the last few years peoples incomes have become more and more complex and so have their finances, it feels like lenders are finally waking up to the changes in peoples lives and circumstances and are adjusting accordingly.
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Gary Bush
Financial Adviser at MortgageShop.com
The UK mortgage market is stuffed with rate variations and it muddies the water for the mortgage payers. Lenders are literally pushing the general public to financial advice firms so that they can get a proper assessment of what their valid mortgage options are in this confusing market. The Shared Ownership mortgage range is often limited from banks and building societies - no idea why though it's a mainstream alternative now that Help to Buy has died.
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David White
Chief Operations Officer at Simply Lending
There are vastly more lenders and products available for consumers compared to 5-10 years ago, especially in the adverse credit field which has naturally grown as a consequence of tougher conditions in the wider economy.

Broadly speaking I believe the more the merrier however this does require Mortgage Advisers to be on the ball as navigating through the specific criteria for all lenders available can feel like entering the Matrix unless you have a suitable system in place and consumers approaching this without support are likely to feel overwhelmed and at risk of missing the best solution.

I’d like to see more competition at 90% as this has always been underserved by specialist lenders and is likely to be a necessary product to drive house purchases in a tough market.
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Peter Stamford
Mortgage Expert at Stamford Home Finance
The abundance of mortgage products feels like a good thing, offering tailored solutions for diverse borrower needs. But, whilst volume is a nice measurement, it's the differences in the lending criteria that truly matter. This variety makes for stronger competition, leading to better terms and lower rates. However gaps do remain, particularly for first-time buyers with limited credit history or those self-employed. More innovative products from major lenders in these areas would significantly enhance our ability to assist a broader spectrum of clients.
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Rowan Frayling
Managing Director at J Finance
Whilst choice is great, and has also created a bit of a rate war, what we need is innovation with all these new products. NatWest broke the mould when they introduced 20% overpayment limits, but Scottish Widows exiting the market has reduced offset options which isn't so great for customer choice. We need a lender or two to come out with something slightly outside the norm, not just 0.1% lower than their competitors.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
Choice is great as long as it provides a greater level of service, but to the customer, it can be confusing, overwhelming as well as time-consuming. It's never been more important, or valuable for clients to have a broker who can navigate through the options to get the right solution. As we continue to see the economy and household finances stretched, we may need more products for those with poor and adverse credit, or self-employed and limited company lending without a long trading history.
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Jamie Thompson
Mortgage Broker at Jamie Thompson Mortgages
An increase in product choice is great for the public, so long as they make the correct choice. That’s where advisers come in.
Some recent products are truly innovative, like Skipton’s track record, 0% deposit mortgage. It allows people to buy so long as they can prove they are already paying rent and bills at or above the cost of their new home with zero deposit. You do have to meet their standard affordability too though.
Accord’s cascade products allow them to lend to people they may have said no to before, as they can price differently for higher risk cases. Similar with their income boost products.
Other products are less innovative such as a token amount of cashback for EPC A and B rated homes, but could still double a lender’s number of products on offer if they have a high EPC option for every product in every tranche as well as a standard option.