Precise Mortgages has launched a retention program for customers coming to the end of their initial fixed or discount deals and will be paying 0.25 per cent procuration fees to any intermediary involved.
The specialist lender stated 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 inform customers 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.
Customers and brokers are able to choose from a two-year fixed rate, two-year tracker or a five-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, Precise promised.
Alan Cleary, managing director of Precise Mortgages, said the numbers of customers coming to the end of their deals 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 the L&G Mortgage Club, added this is good news for customers and brokers.
“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.”
Earlier this month, Virgin Money confirmed it would pay a gross procuration fee of 0.38 per cent on retention business, after an announcement in June allowing brokers to take a more active part in the product transfer process.
In May, brokers called on lenders for more action on procuration and retention fees, stating the payments have not kept apace with increased workloads.