Nationwide pays retention customers £250 but still does not pay brokers procuration fees for retention business, it has emerged.
The lender is sending letters to existing customers approaching the end of their term, which offer “£250 cashback for keeping your mortgage with us”.
The letters, seen by Mortgage Strategy, also promote the lender’s switcher deal range.
A Nationwide spokeswoman says: “Since July 2016, we have offered £250 cashback to thank members for staying with us when they decide to take out new borrowing. In addition, we broadened our offer and extended the 0.10 per cent loyalty discount to existing customers moving home and taking a new product too, which is also available through the broker channel.”
But the lender has no plans to introduce proc fees.
The spokeswoman says: “We have procuration fees constantly under review, but have no plans to change our current model at this time.”
But brokers say they were not informed of the customer offer and expressed frustration with the lender.
London Money director Martin Stewart says: “I fundamentally think that’s bad practice by Nationwide.
“We give lenders 75 per cent of their business. If we had a client that gave London Money 75 per cent of our business, I would look after that client.
“I’m not comfortable with the fact that we do the hard work to introduce a client to them in good faith, then they try to retain that client from us. That’s not fair.”
Your Mortgage Decisions director Dominik Lipnicki says: “If we are scouring the market, we deserve the reward. For brokers that don’t charge brokerage fees, then proc fees are what they survive on. So I find this strange by Nationwide.
“If they are willing to pay £250 to retain the client, then they can pay a broker that £250 too.”
A broker, who wishes to remain anonymous, says: “You would wonder why they can’t pay a broker for retention business on a similar basis?”