The move, which will come into effect in July, is part of a wide-ranging review of the lender’s fee structures to reflect what it highlighted as a ‘challenging time for lenders’.
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Pete Thomson, sales director at Mortgages plc, said: “We have always paid excellent procuration fees and our new fee structure remains competitive. The changes being announced therefore need to be viewed within the context of the level of fees being paid by other lenders. We are mindful of the impact this move will have on our introducers and it has not been a decision we have made lightly.”
Thomson believed that other lenders would have to make similar decisions due to tightening margins.
However, Linda Will, managing director of Accord Mortgages, said it would not set a precedent.
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“We all set our fees in line with other lenders but there is such a wide range of fees, based on differing levels of adversity. It’s a brave move and an unusual one as it has had some of the most competitive rates over the last few months. Having been so aggressive, maybe it is trying to slow the business levels down.”
However, John Malone, managing director at Premier Mortgage Service, commented: “Margins are being squeezed. Many areas are being reviewed by lenders and one of these is procuration fees. I don’t think there will be a knock-on effect on business as it has actually increased procuration fees in other areas. However, it may force other lenders to look at procuration fees and criteria.”
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