The Society has launched another three-year discount mortgage purchase product, available for intermediaries only. The deal is a variation of its current three-year discount product (current pay rate of 5.04 per cent) which has no application fee and pays a 0.35 per cent proc fee (maximum £1,000) and still remains available.
The new product differs in that it has an application fee of £185, debited to the mortgage account on completion, and pays a 0.5 per cent proc fee (maximum £1,000).
Brokers believe this move will tempt some intermediaries to opt for the higher proc fee, to the detriment of the client.
David Hollingworth, mortgage specialist at London & County, said: “If Furness had repriced the product and withdrawn the old one then that would be a different matter. It is up to lenders how they price their products.
“But to still have the old one available and keep it running in tandem with the new one raises serious questions. What it is seemingly saying to the broker is both these products are the same but we’ll pay you more on the newer deal and the customer will have to pay more. It’s outrageous.”
Judith Wren, assistant general manager, branches and marketing at the Furness, said: “Some brokers require higher proc fees than the Society normally pays, therefore we build this into the policy pricing of the product.
“As we do not wish to exclude the clients of these brokers, we offer an option with an additional fee which offsets our increased costs. The Society breaks even on this.”
