Nationwide rebuffs broker churning claims

Nationwide Building Society says comments printed in the Sunday Telegraph yesterday which accused brokers of churning fixed rate mortgages in order to get a fee were taken out of context.

In an interview with the Sunday Telegraph, Chris Rhodes, product and marketing director at Nationwide, claimed some brokers were pushing for borrowers to fix not because of rising interest rates but because of the fee they receive.

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 spokesman for Nationwide says the comments were taken out of context and this is not its view of the broker market.

He says: “We were not saying that borrowers should ignore calls from brokers to fix now, but we believe while it is right for some to fix now it is not right for others.”

He is concerned that the comments give the wrong impression of its view of the broker market.

The article goes on to quote Rhodes as saying: “If you are on a standard variable rate of 2.5% and you are offered a two-year fix at 4.5pc, you have to be comfortable paying that extra 2% points as insurance.

“You may feel that you can afford to take the hit if rates rise – even if they rise by as much as 1.5 points, for instance.”