Borrowers are being warned that they can no longer rely on a mortgage broker to provide them with the cheapest home loans.

For years homeowners have relied on brokers to find the most affordable mortgages, but the dramatic freeze on lending means that many

of the best deals are now available only if you approach a bank or building society direct. First-time buyers and homeowners coming to the end of their existing deals are therefore being urged to explore every possibility in the pursuit of a cheap loan.

It could still be worth contacting a good mortgage broker, especially if your circumstances are out of the ordinary, but it also means checking whether you can find a better deal by approaching a lender direct.

As the mortgage freeze has escalated, an increasing number of lenders have decided that they no longer want to deal through brokers. Last week Scarborough Building Society temporarily axed all 50 of the mortgage products that it sold through intermediaries. Other high street names, such as Cheltenham & Gloucester, still deal through brokers, but they do not offer them their best rates.

First Direct, Woolwich and the Post Office all offer competitive mortgages that are only available direct. HSBC, meanwhile, made the headlines last week by introducing its Rate Matcher mortgage. This allows borrowers coming to the end of a fixed-rate deal with another lender to match their old rate for a further two years.

There are restrictions, however. Homeowners cannot borrow more than 80 per cent of a property's value and the maximum loan is £250,000. The minimum rate that the bank will match is 4.54 per cent and all deals will be fixed for two years. The deal is also available only to borrowers who apply direct to HSBC.

Analysts say that lenders have been cutting the number of deals available through brokers in an attempt to discourage borrowers. In the current climate, lenders who offer even vaguely competitive deals are being inundated with applications.

Dealing directly with the public means that banks and building societies also make more money for themselves. Most brokers are paid commission for every deal that they recommend. Cut out the broker and the lender keeps that cash.

There are a number of ways that borrowers can keep on top of what

is on offer. James Thorpe, of HSBC, says: “Customers can find out about the direct-only deals on the market by checking newspapers, websites and advertisements on television. It definitely pays for customers to shop around.”

Some price comparison websites, such as Moneysupermarket.com and Moneyfacts.co.uk, allow borrowers to check out the whole market before choosing specific deals. Most sites will include the criteria for the deals listed, which is increasingly important as lenders reserve their best deals for customers who are considered very low risk.

Louise Cuming, of Moneysupermarket, says: “Lenders are cherrypicking borrowers, and the best deals that you see advertised are generally only for borrowers who have squeaky-clean credit records. By using the search engines on price comparison websites, borrowers can search for deals available to new customers with similar credit histories, incomes or sizes of deposit. The result is a list of the deals that are likely to be available to you.”

The best three-year fix on Moneysupermarket is 5.49 per cent with Abbey. The arrangement fee is £675 and the loan is available to those borrowing up to 90 per cent of a property's value. Monthly repayments on a £150,000 loan would be £927.

The most competitive three-year fixed-rate deal through London and Country, the broker, is from Halifax, with a rate of 5.62 per cent and an arrangement fee of £999. The maximum loan-to-value (LTV) ratio is 75 per cent. Monthly repayments on a £150,000 loan would be £938.

HSBC has a direct-only deal with a discounted rate of 5.43 per cent for two years. The monthly repayments would be £920. The fee is £999 and the maximum LTV is 90 per cent.

The best discounted deal from a broker is with Dunfermline Building Society, which is offering a rate of 5.64 per cent, with a £999 fee. The maximum LTV is 80 per cent and monthly repayments on the same £150,000 loan would be £939.

Despite most of the best deals being those direct from the lenders, it may still be worth asking a broker what it can offer. Many of the biggest companies do not charge a fee for advice because they are paid commission if you agree a deal - so you lose nothing if you walk away.

Melanie Bien, of Savills Private Finance, the broker, says: “The cheapest deals might be direct-only, but there will be strict criteria. Brokers can give borrowers tailored advice on the best deals available to them. For example, increasingly we are getting people who have been turned down by their original lender or who have a missed payment on their credit report, which has adversely affected their credit ratings.”

Whether borrowers find deals that suit their requirements through an intermediary or online, the message is the same: don't hang around. John Postlethwaite, of Punter Southall, an independent financial adviser, says: “Deals that are there one day may not be the next. When you find a good deal, call the lender straight away and check it is available. If it is, book an appointment.”

Case study

Dan Pironti and his partner, Karen Davies, have bought a six-bedroom house in Clapham, South London, at auction for £350,000. They needed to find a mortgage quickly or risk losing the property, so they turned to a broker for help.

Savills Private Finance found them a Bank of Scotland tracker mortgage with an interest rate of 7.6 per cent. Mr Pironti, 32, and Ms Davies, 27, will collect the keys less than a month after they first viewed the property.

Mr Pironti, who works as a procurement consultant, says: “We went straight to a broker because, in my experience, when you need something done quickly, it pays to speak to the experts. High street lenders do not always advertise all their deals, so you need to speak to someone who knows the market.”

The couple had been watching the housing market for the past six months, keeping an eye on property and mortgage websites, before finding their new home on an auction website. “It needs a fair bit of work but we are really excited about picking up the keys,” Mr Pironti says.

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