Mortgage brokers have been left frustrated after TSB gave them just 25 minutes warning of an increase in interest rates.
Brokers were emailed by the lender at 12.35pm today (March 7) and informed that rates would be increasing by as much as 0.20 percentage points with effect from 1pm.
Rate increases of this speed have not been seen in months and brokers have slammed the short amount of notice as unusual, unfair and unacceptable.
I'm glad I hadn't recommended TSB to any of my clients this week — Mortgage brokerThe withdrawal impacts TSB’s five-year fixed rate purchase and remortgage deals up to 85 per cent loan-to-value as well as product transfers for existing clients.
Responding to the hike, Houz Mortgages director, Benjamin Blyth said “almost nothing can be done compliantly in 25 minutes”.
In Blyth’s view, a rate increase with such short notice is not aligned with the spirit of the consumer duty.
“We can't be pressuring people into proceeding with a recommendation. Even if we could guarantee to make contact with clients that quickly to give them such a ridiculous deadline, it would not be the right thing to do.
“It shows how some decision-making by lenders is disconnected from the real world of delivering mortgage advice,” Blyth said.
Call for 24 hour notice periods
Calls for a notice period on rate increases have been reignited in response to the move and many brokers have said a minimum notice of 24 hours should be the norm across the board with all lenders.
“We haven't seen products being withdrawn at such short notice since October last year and before that, it was at the start of the pandemic,” Naomi Dent, broker with Avail Mortgage Brokers said.
“This is not common, not acceptable and certainly not treating customers fairly. All lenders should have to give a minimum of 24 hours' notice before a product is withdrawn,” Dent said.
RNR Mortgage Solutions director, Anil Mistry agreed and said: “In the present circumstances, it is entirely inappropriate to operate in a manner akin to that of October 2022.”
“A broker who recommended a rate to a client earlier on Tuesday may now face the predicament of being unable to process the application, necessitating the need to re-source and make fresh recommendations.
“TSB should take a page from Coventry Building Society's playbook and provide at least 48 hours' notice,” Mistry added.
Likewise, Rosehill Financial Services, managing director Samuel Ewen was in favour of a notice period and said: “A mortgage is most people's largest debt, so deciding on a product and having an application processed in under 30 minutes isn't realistic for most.”
Mortgage specialist at Lifetime Wealth Management, Katy Eatenton added: “I received the email and thought, 'I'm glad I hadn't recommended TSB to any of my clients this week'.
“It's not acceptable and creates an unnecessary level of panic.”
FTAdviser has approached TSB for comment.
jane.matthews@ft.com
