Nationwide Building Society back-tracked on comments by one of its directors last week who accused brokers of churning fixed rate mortgages to get a fee.
Chris Rhodes, product and marketing director at Nationwide, was quoted in last week’s Sunday Telegraph saying some brokers were pushing borrowers to fix, not because of the possibility of rising interest rates but because of the proc fee.
When asked why so many brokers were urging borrowers to fix, he is quoted as saying: “Churning mortgages gets them [brokers] a fee.”
But a Nationwide spokesman says the comments were taken out of context and this is not its view of the broker market.
He says: “We were not saying borrowers should ignore calls from brokers to fix now but we believe that while it is right for some to fix now, it is not for others.”
He adds that he was concerned the comments give the wrong im-pression of the lender’s view of the broker market.
The comments came as the society raised most of its fixed rate products by 0.3%. Its two, three and five-year fixed rates for house purchase, remortgage and further advances all rose by 0.3% last week.
Rob Roberts, head of mortgage service at LIFT Financial, says there are a few brokers that will take advantage of uncertainty over fixed rates to churn mortgages, but they are in the minority.
He says: “Rhodes’ view is stuck in the mid-1990s – things have changed. There are still some brokers who only put their clients on two-year deals to remortgage them in a few years.
“But most brokers now charge a fee to carry out a review of customers’ finances, so it is irrelevant whether they remortgage the borrower because they charge a fee for advice and don’t rely on commission.”