Abbey introduces percentage booking fees

20 October 2010 | By Natalie Thomas

Abbey for Intermediaries is to launch a range of new mortgages with percentage booking fees on Friday, exclusively for the intermediary market.

It says the introduction of percentage booking fees as a standard feature on selected mortgages is in direct response to feedback from intermediaries.

It will still continue to offer some of its other products with flat fees.

The new range of mortgages is as follows:

Two-year tracker at 2.85% with a 0.50% fee, available up to 70% LTV to homebuyers
Two-year tracker at 3.07% with a 0.50% fee, available up to 70% LTV to remortgagers
Two-year fix at 3.45% with a 0.50% fee, available up to 70% LTV to homebuyers
Two-year fix at 3.53% with a 1% fee, available up to 75% LTV to homebuyers
Two-year fix at 3.75% with 0.50% fee, available up to 70% LTV to remortgagers
Two-year fix at 3.83% with a 1% fee, available up to 75% LTV to remortgagers

The products have a minimum loan size of £25,000 and the percentage fee must be added to the mortgage loan in all cases.

All of the new products come with the Homebuyer or Remortgage Solution respectively.

Alan Mathewson, managing director of Abbey for Intermediaries, says: “We know from speaking to intermediaries that percentage fees were one of the features available through the Alliance & Leicester brand that they most valued.

“We are therefore delighted to support intermediaries with the introduction of percentage fees through Abbey for Intermediaries.

“The launch of this new range of mortgages, available exclusively to the intermediary market, demonstrates our commitment to listening to and meeting the needs of intermediaries, to help us become the lender of choice.”

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Readers' comments (21)

roger travis | 20 Oct 2010 4:33 pm
interesting thought, although i have never seen the value in them. the marginally lower rate, (which less face it if a client cannot afford a slightly higher rate they shouldn't be going for the loan) is hit with a massive fee, which gets added to the loan and interest payable for the life of it.

how about they bring in some of the "underwriting decisions on a case by case basis" that A&L were good at, or their fully flexible tracker which had a damn sight lower fee than the Abbey offset one?

its bad enough BTL clients get stuffed with some of these huge fees, but to start in the residential side, its a sorry day.
who are they listening to?
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Richard Bousfield | 20 Oct 2010 4:33 pm
Percentage fees valued? Don't think so, at least most are 0.5% though, bit more realistic.
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Anonymous | 20 Oct 2010 4:35 pm
"Most valued" the percentage fee...! Am I missing something, as a broker I find them totally repulsive and simply ignore them as more often than not it simply drives up cost and so higher rates are more affordable and long term the better option. I actually laughed at the reason behind it was because brokers asked for it. Who did they speak to !? I must be missing something here surely.
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Anonymous | 20 Oct 2010 4:36 pm
perhaps a good idea, loans under £200k benefit as most fees are £995.

But the 3.07% remtg at 70% with 0.50% fee is totally blown away by Woolwich 2.68% no arr, survey or legal fees, and £300 cashback. Adding a 4.24 SVR and i can t see anyone opting for that!!!!!!
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Anonymous | 20 Oct 2010 4:43 pm
Percentage booking fees in response to demand from Intermediaries, who are they kidding? How can they justify a higher fee just because someone wants to borrow more than the next person and the fact the amount has to be added to the loan. What happened to TCF? 70% and 75% advances are not exactly high risk are they?
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Anonymous | 20 Oct 2010 4:47 pm
Pah! What about Flexi Trackers, Abbey?! What about debt cons greater than £30k or 30%?! What about one year trading?! Some clients need more than just a reasonable fee! Pah!
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alastair thomas | 20 Oct 2010 4:49 pm
How kind you cant pay the fee up front it must be Added !!
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Colin | 20 Oct 2010 4:59 pm
probably just another way to dual price without the ease of being able to compare the fees as no flat fee via brokers will make every case scenario different.

Just who they spoke to about this is a mystery as I cannot think of anyone who would favour a % fee basis......
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roger travis | 20 Oct 2010 5:01 pm
is it a sneaky way of trying to appear not to dual price - ie keep the rate the same, but stuff our clients who pay the % fee, and then client more likely to go direct........
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Anonymous | 20 Oct 2010 5:43 pm
I bet they won't list who the brokers are that opted for this - maybe because they don't exist!
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