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Hargreaves Lansdown will rebate proc fees

Hargreaves Lansdown is to pay part of the procuration fee it gets

from lenders to borrowers who go execution-only under its new

mortgage service.

As exclusively revealed in Money Marketing last September, Hargreaves

Lansdown set up a discount mortgage brokerage arm to diversify from

its core investment and pension business but until now the service

has only been targeting its 400,000 client base.

The service covering the whole market aims to rival major players

such as Charcol and London & Country will go out to the general

public this month backed by a national marketing campaign.

The key selling point will be for paying cash back to borrowers who

have decided on their chosen product and lender and who submit their

application through the Hargreaves Lansdown freefone service.

The amount refunded varies with the size of loan but the company

gives the examples of a rebate of £100 on the minimum loan of

£75,000 and £500 cashback on a loan of £500,000. It

will offer advice where a client wants this service but will retain

the full proc fee.

But some rivals, including London & Country, Mortgageforce and

Charcol, cast doubts on how many borrowers will be confident to go

execution-only.

Broker club Prudential Mortgage Services says this could set a

precedent where lenders will only pay a small introductory fee rather

than the full proc fee to brokers in line with the level of service

they offer.

Mortgageforce managing director Rob Clifford says: “Execution-only

has struck a chord for Hargreaves Lansdown in the investment sector.

But a mortgage is still the biggest financial transaction for most

people and this will cater for only a small segment.”

Hargreaves Lansdown head of mortgages Ian Jordan says: “We see lots

of information on what mortgages are available and all this gives

clients the confidence to do it themselves but they have to submit

the mortgage somewhere and we will refund part of the proc fee.”

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