Precise Mortgages, the specialist lender has launched a retention program for customers coming to the end of their initial fixed or discount deals and will be paying procuration fees when an intermediary is involved.
The lender says that it will be writing to eligible customers up to three months in advance to inform them that their initial rate is coming to an end and offering additional product options. The letter will clearly inform the customer that they should refer to their broker if they require advice. If the customer chooses not use a broker they will be able to transfer to a new rate on an execution only basis.
Where a broker gives advice and the customer switches to a new product with the lender a procuration fee of 0.25% will be payable.
Customers and brokers are able to choose from a 2 year fixed rate, 2 year tracker or a 5 year fixed rate, with all products having no lender fees. As the lender already has all the information it needs to complete the transaction, the process will be straightforward and will require minimal paperwork, no conveyancing and no underwriting.
Alan Cleary, Managing Director of Precise Mortgages says: “The numbers of customers coming to the end of their deals with us is quite small at the moment but will become significant in 2017 and beyond. We are in test and learn phase for the next six months and will make changes as appropriate. The one thing I am certain of is that this gives customers and brokers more product choices which I believe is a good thing.”
Jeremy Duncombe, Director of L&G Mortgage Club added: “This is good news for customers and brokers with Precise Mortgages doing the right thing and paying brokers for the work they are doing. Precise Mortgages join a growing list of lenders who are recognising the vital role of the broker in giving best advice to the customer when their rate matures. We expect more lenders to follow in making this the norm.”