The internet-based service arranges the client’s chosen mortgage and splits the broker’s commission fee with the client once completed, giving them a cash sum at the end of the process.
The firm claimed a typical £200,000 mortgage would offer the client £350 cash at the end because they have done half the work in sourcing the product.
However, the industry has given the proposal a frosty reception.
Simon Biddle, head of marketing and communications at Infinity Mortgages, said: “The most important thing about the intermediary market is the level of advice the customer gets and the service the broker provides. I don’t think many lenders would want to have moneybackmortgages on their panels because I don’t know how they would be regulated.”
John Smith, sales and marketing director at the GHL Group, commented: “I cannot see that an astute consumer would risk not having the benefit of face-to-face advice for a percentage of the brokers’ commission payment. The moneybackmortgages website claims many people are capable of researching their own mortgages and its aim is to provide the consumer with the tools to become a broker without the relevant qualification and experience in this market. Does this suggest moneybackmortgages sees no benefit for the need for the compulsory regulatory examination the professional adviser needs to go through?”
Michael Brill, director at Baronworth Investment Services, believed the service could be useful if the potential borrower had a background in financial services.
“If the client knows what they are doing and knows to carefully read the small print then that’s fine. The problem is if they don’t know to do this and opt for the headline rate, often this means the mortgage ends up costing them more than any money they might get back as part of the intermediary commission fee.”
