Brokers say they are being cut out of the loop by Clydesdale Bank writing to customers before their mortgage renewal and offering an arrangement fee discount if they go direct.
The lender is writing to fixed rate clients offering the deal up to three months before their fixed rate mortgage term ends, Mortgage Strategy can reveal.
A Clydesdale spokesman says: “We are focused on providing the very best customer experience, and as such we contact all of our mortgage customers directly before the end of a fixed rate. We do this to provide a reminder and to highlight switching options.
“We offer existing customers a reduction in arrangement fees and the ability to switch their product without penalty up to three months before their current rate expires, whether they choose to approach us directly or go through a broker. This ensures that our customers are fully armed with the information they need to make the right decision for them.”
The lender does also give fee discounts to brokers, though a lender spokesman could not say how this compared to the direct fee reduction.
The news of the product transfer fee reduction has been criticised by brokers – though they say Clydesdale is generally an intermediary-friendly lender.
Chadney Bulgin mortgage partner Jonathan Clark says brokers will not welcome the move, and that intermediaries need to contact clients earlier than ever before.
He says: “Clydesdale’s cashback offer to clients that take a new product transfer deal directly with them is bound to grate with brokers.
“However, we should remember that we are able to reserve a new product up to six months in advance of the expiry of their current deal and switch them three months early, even if early redemption penalties would ordinarily apply, so we really need to be re-engaging with our Clydesdale clients seven months before their deal expires.”
Xpress Mortgages founder and mortgage adviser Rachel Lummis says the Clydesdale move is “not on” and “out of order”.
But London Money director Martin Stewart says he is not fazed by the news.
He says: “The answer is the broker needs to be a bit more on the ball, but I don’t have a big issue with it. It’s up to us to maintain contact with that client. I’d rather they didn’t write out to clients, but we haven’t lost a client.
“They’ve always written out to our clients three months before the end, though as for the £250 discount to fees, if the client comes to us for product transfer we get a discount off the fees if we do it online.”
Clydesdale has paid retention procuration fees since 2014, in contrast to many other large lenders.
Last September Mortgage Strategy reported that Nationwide was paying customers £250 cashback to keep their mortgage with the lender, though the lender did not pay retention procuration fees.