The effect of mortgage brokers on banks’ business models

Marcus Buckmann () and Buckmann Eccles ()
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Marcus Buckmann: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH
Buckmann Eccles: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH

No 1104, Bank of England working papers from Bank of England

Abstract: We study the effects intermediaries have on the UK mortgage market by exploiting the strong increase in broker intermediation between 2013 and 2020. Our findings indicate that this rise coincided with more households choosing mortgages with a short fixed term, due to brokers steering households towards these mortgages to increase fees from repeat business. Increased broker intermediation also enabled smaller lenders to reach more customers by geographically diversifying their mortgage portfolios, which gave smaller lenders the opportunity to specialise their mortgage portfolios, concentrating on long fixed-term and high LTV mortgages.

Keywords: Mortgages; brokers; banks; household finances; portfolio diversification. (search for similar items in EconPapers)
JEL-codes: D43 G21 G28 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2025-02-12
New Economics Papers: this item is included in nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:1104

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