Mortgage brokers are waiving hundreds of pounds worth of charges in order to attract clients and compete with fee-free firms.
Proc fees vary between lenders and types of deal but typically they are set at around 0.35 per cent, for instance £700 for a £200,000 loan. Broker fees can vary from being as low as £99 to over £1,000.
Money Marketing has seen evidence of brokers being prepared to waive fees if they are in danger of losing business to fee-free brokers such as London & Country.
One borrower using YourMove, which charges £399, saw her fee waived when she negotiated.
She said: “The broker told me ‘No one else looks at the whole of market unless you pay for it’. I thought that this was how it worked.
“When I phoned to say I can get a free service elsewhere she repeated they won’t look across the whole market. But the minute I said London & Country she dropped the fee.”
London & Country provided Money Marketing with numerous examples of estate agency brokers waiving fees when pressured.
Your Move financial services director Simon Cox says waivers need senior management approval.
He says: “It is not our normal practice to waive a broker fee simply because there is an offer to waive it by another broker as the services being offered may not be on a like for like basis.”
London & Country associate director of communications David Hollingworth says: “For a customer, would you feel it is fair to waive a fee when some people clearly don’t and will be charged? It appears estate agent brokers can not compete with us simply by going head to head.