Price Comparison Sites

A price comparison site does exactly what you would expect it to do, it searches the market and compares prices for mortgages, as well as a number of other financial products. They are very appealing to customers and it is not hard to see why so many consumers get sucked into using them as their ultimate tool when it comes to finding the best mortgage. There is nothing wrong with using this method but it is important that you don't rush into anything.

The way a price comparison site works means that the top result it will come up with will be the product that offers the cheapest rate, but that is normally it. It will not take into account your personal situation and not do an in-depth check into your circumstances. Some sites however will categorise products and highlight the difference between buy-to-let, self-cert and remortgage.

Advantages of Price Comparison Sites

If you are lucky enough to be a prime borrower and don¹t have any special requirements then a price comparison site can offer you a good range of products that you will be able to use. Also, even if the product that the site initially offers isn¹t suitable for your needs then it may give you an idea of which lenders are offering good products at the moment, so you can then go direct to them and get a good deal.

Price comparison sites are able to search thousands of products in the market and can give you a very comprehensive search, compared to going direct to a lender, even if you are a first-time buyer simply wanting to browse the market, price comparison sites can give you a good idea of how much you should expect to pay.

Disadvantages of Price Comparison Sites

Price comparison sites are very limited in what information they can give you, they normally work on the headline rate of a product and not a lot else. If you are a specialist borrower and need a sub-prime mortgage or need to self-cert then a price comparison site might not be able to give you the help you need.

The sites work by rates alone, so the product that appears may for example be a tracker product with a good headline rate, but this may go up over time and a fixed rate may be the cheaper option overall, but you would not be able to see this.

Rates on comparison sites do not normally take into account any extra fees that a lender may add onto the mortgage, so while the headline rate may look cheaper, once you have added all the extra charges it will not work out to be the cheapest.

A good mortgage broker will normally have what they call a sourcing system, this will be able to carry out a similar search to that of a price comparison site but it will do it in a more advanced way and the broker should be able to advise you about all the different types of products and tailor them to your needs. Although price comparison sites search a large majority of lenders, there will be some deals that it doesn¹t show, such as exclusives deals that a mortgage broker may be able to get hold off.

Price comparison sites may be able to offer you an advanced search, but this doesn¹t necessarily mean that you should make this your one stop shop. You should try and use them as a starting point and get some expert advice along the way.