Digital vs Local Mortgage Brokers: A Comparison

Introduction

Mortgage brokers arrange around 87% of mortgage loans [1], thus playing a key role in helping borrowers navigate the mortgage market. For borrowers looking for a mortgage, a common question arises: should they go for a digital mortgage broker or a traditional local one? Both types are FCA-regulated and can access a broad range of lenders, but differ in areas such as cost, speed, customer experience and specialisation. This article explores some of these factors to help you decide which broker model might best suit your needs.

Fees and Payment Models

One of the clearest differences is how brokers are compensated. Digital brokers typically market themselves as "fee-free", meaning that they do not charge you directly. Instead, they earn a commission or procuration fee from the lender once your mortgage completes.

Traditional local brokers, on the other hand, may charge you a fee, in addition to receiving a lender commission. This fee could be a flat rate (£300–£500), a percentage of the loan (0.3–1%) or even based on an hourly rate. Some brokers use a hybrid model, charging a fee for complex cases while waiving it for standard ones. Always ask whether fees apply, how much they are, and whether they are refundable if the mortgage does not go through.

While digital brokers such as Trussle, Habito and L&C mostly operate fee-free, some local brokers also waive fees to remain competitive. Still, many charge a fee and argue that this reflects the depth of service, personalisation and access to deals that only they can provide.

Digital brokers win on cost for standard cases. But even a £500 broker fee can be outweighed by a better mortgage rate over time, so it is worth assessing the value, not just the price tag.

Speed and Availability

Digital brokers excel in convenience. You can apply online at almost any time. Most platforms also offer quick Decisions in Principle (DIPs) and let you upload documents, track progress and communicate with advisors during extended hours or sometimes even 24/7.

This speed is ideal for time-sensitive applications. Algorithms can also recommend products within minutes and applications are often submitted electronically to lenders (as with traditional local brokers).

However, local brokers can add speed in other ways. They often know which lenders are likely to process applications more quickly, and they can personally chase underwriters, valuers and solicitors to keep things moving. While initial meetings may take longer to set up, their active follow-ups can help prevent delays down the line.

It is also worth noting that not all online brokers are fast in practice. Large platforms handling thousands of clients can see slower response times, especially during peak periods. Meanwhile, many local brokers also use digital sourcing tools and some can turn around queries and provide advice within hours.

Digital brokers offer faster initial access and up to 24/7 functionality. Local brokers may be slower to start with but are likely to be better at resolving complex issues and subsequent delays through personal follow-ups.

Technology and User Experience

Digital brokers are built for ease and automation. Expect intuitive websites or apps where you can fill in details, receive mortgage matches, upload documents and track your application with dashboard tools. Some even use AI chatbots, such as Habito, to collect basic information upfront. For tech-savvy clients, this is a dream: no extensive initial paperwork or meetings. Some brokers also offer Open Banking integration and credit checks to speed things up, while others monitor your mortgage post-completion and alert you when it is time to remortgage.

Local brokers typically offer a more traditional experience. You will communicate over the phone, by email or in person. This personal approach can be less stressful for those who prefer things explained to them personally.

The trade-off is clear: automation vs personalisation. With digital platforms, the process is consistent and fast. With local brokers, the focus is on building rapport, understanding your goals and adapting advice to suit.

Choose digital if you want speed and convenience. Choose local if you value personalised support and are not keen on doing everything online.

Advice Quality

All mortgage brokers are required to be qualified and regulated, so advice quality should generally be high. The key difference can lie in experience and specialisation, for example when it comes to BTL mortgages or complex remortgages.

Buy-to-Let (BTL) Mortgages

BTL mortgages come with stricter criteria – stress testing, rental calculations and lender-specific rules. About 75% of BTL loans are arranged through brokers [2], as many landlords rely on expert guidance.

Local brokers often shine here, particularly with portfolio landlords, HMOs and limited company structures. Their knowledge of specialist lenders and regulation can be invaluable.

Digital brokers are increasingly offering BTL services, too. Many have specialist teams or BTL-trained advisors. If your situation is fairly standard – one or two properties and good credit – a digital broker can usually deliver the right product. Just ensure they have whole-of-market access, not just a limited panel of lenders.

Remortgaging

For standard remortgaging – switching to a better rate or borrowing more – digital brokers could be a good choice. Some even offer mortgage monitoring tools that alert you when a new deal could save you money, a helpful feature for busy homeowners.

For more complex remortgages – for example, increasing the mortgage or changing the mortgage term – a local broker may be better placed to provide holistic advice. They may also spend more time understanding your longer-term goals and offering tailored strategies that digital formats cannot easily replicate.

In essence, for simple BTL or remortgages, digital could work well. For more complex or situations, a local broker’s input can be worth the extra cost.

Pros and Cons Summary

How to Choose the Right Type of Broker

Choosing between a digital and local broker comes down to your personal situation and preferences. Consider the following:

• Complexity: If your case is straightforward, consider going digital. For complex BTL or unusual remortgage scenarios, a specialist local broker might be required.

• Personal Comfort: Prefer talking to someone in person? Go local. Comfortable online and want a largely automated process? Go digital.

• Speed: Online brokers are hard to beat for quick quotes. But if issues arise mid-transaction, a proactive local broker can push things forward faster.

• Cost vs Value: Saving on broker fees is appealing, but not if you miss out on a better rate or advice. Consider the total long-term value, not just the upfront cost.

• Reputation Matters: Whichever route you take, choose a reputable, FCA-authorised broker. Read reviews, ask for recommendations and confirm whether they have access to the whole market.

Conclusion

The rise of digital mortgage brokers has made mortgage advice more accessible, often more affordable and quite convenient. But local brokers still play a vital role, particularly for those who want tailored and hands-on service or have more complex needs.

FAQs:

Q. Are digital mortgage brokers really free to use?

A. Yes, most digital brokers operate on a fee-free model, meaning that they do not charge you directly. Instead, they earn a commission from the lender when your mortgage completes. This makes them attractive for many borrowers, especially those with straightforward cases. However, always check whether the broker is genuinely whole-of-market and FCA registered.

Q. Do local brokers offer better mortgage rates than online brokers?

A. Both digital and local brokers often access the same rates from the same lenders, especially if they are "whole-of-market". However, a local broker’s value may lie in personal advice and problem-solving, which can result in a better deal if your case is complex (for example, if you have multiple buy-to-let properties or credit history issues).

Q. Can digital brokers handle complex buy-to-let cases or portfolios?

A. Some digital brokers have dedicated BTL teams and can handle more complex scenarios, but their advice may still be more form-based. For landlords with portfolios, HMOs or limited company structures, a local or specialist BTL broker may offer more guidance and a deeper understanding of lender criteria. Always ask about their experience before proceeding.

Q. Which option is faster – a digital or local broker?

A. Digital brokers are generally faster for initial quotes and Decisions in Principle (DIPs), which are sometimes available within minutes online. Many also offer 24/7 platforms for uploading documents and tracking progress. Local brokers might take longer to get started due to the need to set up initial calls and meetings, but they often speed up the mortgage process later by chasing solicitors, underwriters and lenders, and can be a great help in complex situations.

Q. Is the advice quality the same between digital and local brokers?

A. All mortgage brokers must be FCA-authorised and qualified, so the standard of advice should be professional regardless of format. The main difference lies in how personalised the advice is. Local brokers typically offer more tailored advice. Digital brokers may be better for standard deals.