Lloyds Banking Group will begin paying full procuration fees on all retention products from 1 August.
At present, Lloyds brands Halifax and BM Solutions, the group’s buy-to-let lending arm, pays full proc fees (the same level as new business) on retention products up to 75 per cent loan-to-value but pays reduced commission on products over 75 per cent LTV.
But from next month, both brands will pay full procuration fees on all retention deals, regardless of the LTV.
The lender is also scrapping its maximum £2,500 commission cap on retention proc fees.
Lloyds says it wants to reward brokers for helping to keep customers by increasing the procuration fees it pays for retention deals.
Chadney Bulgin mortgages partner Jonathan Clark says: “This is a good move and is good news for brokers.
“It simplifies the proc fees and removes the concern that a borrower will have to have a certain LTV to get a better rate.”
The group overhauled the way it pays commission earlier this year, which was first tipped by Money Marketing sister title Mortgage Strategy. It now pays proc fees based on case quality, using metrics such as applications to completions ratio, arrears performance and what measures a firm has put in place to prevent fraud to determine the commission paid.
The move follows that of rival Abbey for Intermediaries, now Santander for Intermediaries, which switched to a quality-based payment system in July 2012.