Want the best home loan? Then you're on your own, kid

During the seemingly endless golden era of cheap mortgage rates and aggressive competition among lenders, going to a broker was seen as the most reliable route to hunting down the best deal in a crowded market. Between April 2006 and September 2007, according to statistics from the Association of Mortgage Intermediaries (AMI), 61 per cent of all mortgages were sold through brokers.

But post credit crunch, things have changed. With funds drying up, lenders have put up the barriers on the flood of applications for cheap deals through brokers. Instead, as banks and building societies look to monitor would-be borrowers more carefully by taking applications through branches, call centres or online, the top offers are no longer the province of the middle men.

"Most best-buy deals are now coming direct from the lender," says Darren Cook, head of mortgages at financial analyst Moneyfacts. "For example, of the top 20 two-year fixed and tracker mortgages, only two are available through intermediaries (from Nationwide and Melton Mowbray building societies) – and these are ranked 18th and 19th. All the others require that the borrower approaches the lender direct."

Last week, the mortgage information service mform. co.uk found that the best direct three-year fixed-rate deal on the market was from Nationwide, priced at 5.74 per cent. Conversely, the best three-year deal available to brokers came from Nottingham building society, at a cost of 6.79 per cent.

On a true-cost basis – which means mortgage fees are incorporated – a borrower taking a £150,000 repayment loan would pay £38,480 over three years with Nationwide and £41,118 with Nottingham.

Some banks, such as Abbey, have even started to offer "branch exclusive" deals – designed, says a spokesperson, "so our staff can offer customers with whom they already have a relationship good products that reward loyalty". But the move could be regarded as harking back to the old days of making an appointment with your bank and asking for a mortgage face to face.

Nevertheless, a branch exclusive will save the borrower a big sum in interest payments. A two-year fix through the branch is priced at 5.88 per cent with a £999 fee at 70 per cent loan to value (LTV), while the same deal via "any channel" costs 6.14 per cent and a £999 fee.

Unsurprisingly, brokers have cried foul and want the Financial Services Authority (FSA) to step in and level the playing field. But Hector Sants, chief executive of the City watchdog, said recently that lenders are not obliged to deal with brokers. "How they choose to price and distribute their products is a commercial matter. There have always been certain lenders who choose not to offer their products through brokers, and others who differentiate pricing depending on the channel."

But Jonathan Cornell, managing director at broker Hamptons, says borrowers as well as brokers are ill-served by the new arrangements. "By going direct to the lender, consumers are not only left with much of the legwork in getting the mortgage, but they are taking the advice of high-street lenders that can only recommend mortgages in their own range. It therefore has to be questioned whether borrowers are really being given the advice they need when making a decision on their largest financial commitment."

Some brokers have even suggested they could act on a client's behalf in researching direct deals – in exchange for a fee. The AMI has been in discussions with the FSA about removing regulatory barriers to enable this to happen.

In the meantime, many homeowners who are nearing the end of their mortgage deal are bracing themselves for a lengthy trudge down the high street.

But the mortgage market has become a treacherous place to navigate alone, warns Louise Cuming, head of mortgages at price-comparison site Moneysupermarket.com. "Lenders are a lot more selective now, and going direct to get the best rate doesn't necessarily mean you'll be accepted for the mortgage. In other words, while lenders are more 'cutting edge' in their lending, customers will have to be more cutting edge in their borrowing profiles too."

Be aware that if you are declined, this can have a negative effect on your credit rating and therefore your chance of success elsewhere.

Brokers are also there to help borrowers get the right type of deal – an offset or a mortgage with no tie-ins, say – rather than simply the best interest rate, says Tracy Elwick at the AMI. "Two in 10 homeowners go to a broker for the best rate while eight out of 10 go for advice. You don't have to be a special case or on the edge of affordability to benefit."

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