Nationwide’s snubbing of retention proc fees puts it behind the curve…
In response to the story in Mortgage Strategy about Nationwide paying retention customers £250 but snubbing proc fees for brokers, this is very discouraging.
We also submit huge volumes of business to Nationwide and are disappointed it has taken this position.
Retention proc fees have been under review for too long and brokers are getting frustrated with this. Nationwide needs to look at what Barclays, Clydesdale, Halifax and Virgin are doing. They really value the intermediary market, and back it up.
John Yerou, Financials UK
…and contradicts its claim to be focused on intermediaries…
For a lender that claims up front to be intermediary focused, Nationwide’s actions don’t back it up. It is a strange move.
As a wider point on retention proc fees, the downside is that, once brokers have factored in the additional fees they would need to charge to cover the lack of proc fees from such lenders, it could be cheaper for a client to simply switch lender.
Chris Hulme, Clayton Hulme
…while incentives are a dangerous ploy that can land clients in trouble
The danger of offering an incentive, with no additional advice or review, is that a client gets lumbered with a deal they will later need to change, and £250 won’t go far towards redemption penalties.
I often advise clients to stay with their existing provider but, in some cases, it’s not best advice. Also, by doing this Nationwide will confuse vulnerable customers who maybe have not realised the implications of locking in for another two, three or five years – unless Nationwide is offering a fully advised service in addition to the £250, which I doubt.
In client reviews I consistently find that so much has happened in their life since they took out the mortgage, and everything has to be reconsidered to take account of current and future needs.
So any lender offering such an incentive needs to be very careful.
Samantha Cox, Whichers
Lenders’ tricks with variable rates harm our reputation all over again
Moneyfacts found that a number of lenders had hiked the price of variable-rate mortgages on offer to new borrowers in anticipation of the recent base rate cut. This meant they could reduce the cost again after the base rate cut and it would appear to be in response to the Bank of England’s decision. No wonder financial services gets a bad name sometimes.
People do not begrudge us making a profit. They understand the need. But they hate a lack of transparency or, worse, ‘tricks’. Variable-rate mortgages are not trackers; lenders, particularly building societies, have to balance the needs of borrowers and savers. Indeed, the BoE requires us to have a good slug of variable-rate mortgages to help manage what we do.
There are no excuses for the sort of behaviour Mortgage Strategy reported and, until it stops, the public, media and regulators won’t be giving us much credit for moving on from the crash.
Mark Bogard, Family BS