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NU pledge to probe rate changes over lifetime mortgage

Norwich Union has conceded that there could be a problem with its lifetime mortgage and says it will be looking into the issue of rate changes between application and completion.

Last week, NU met Mortgage Portfolio Services principal Simon Chalk to discuss issues raised over the product&#39s mark-to-market early redemption penalties and the fact that the rate a consumer applies for could be different to the one they get on completion.

Chalk, who last month wrote to the Mortgage Code Compliance Board complaining about the product, says NU did not back down over the early redemption penalty, arguing that while it is complicated, it remains the best way of balancing the risk to shareholders with fairness to the client.

However, head of marketing Paul Stokes said he had not appreciated how a possible rate change between application and completion could affect an intermediary sitting in front of a client and told Chalk that he would raise the issue at NU&#39s next development meeting.

Standard Life Bank is considering removing the same feature from its lifetime mortgage. As things stand, SLB says it will honour whichever rate is the lowest, whether this is on application or completion.

Chalk says: “Paul said he would look at this issue at NU&#39s development meeting and see if there is any way of improving it. It was not a commitment but it is still a move in the right direction.”

Stokes says: “The meeting helped me to understand things from a broker&#39s perspective. I cannot give timescales but we are looking into the implications of this issue to see what it means for us.”


Home information packs only part solution – MS

Marlborough Stirling says the introduction of home information packs is only a part solution to the problems that dog the home buying process. Mortgage consultant Nik Halton says: “HIPs should speed up the house buying process and make it easier for consumers. However, it is doubtful as to whether they will go far enough. There […]

ISIS welcomes VCT boost from Government

ISIS equity partners welcomed the Chancellor&#39s moves to boost VCT investment in his pre-Budget Speech. David Thorp, Investment Manager of the Baronsmead VCTs, said “We welcome the announcements, which are designed to increase the amount of money available for VCTs to invest in UK businesses with high growth potential.” Thorp, also Chairman of the VCT […]

Lords reject Revenue ruling on non-execs

The House of Lords has overturned an Inland Revenue ruling that would have made it impossible for retired directors to take their company pension as long as they remain a non-executive director. The Revenue had tried to recover £230,000 from a non-executive director of a carpentry firm after he resigned his full-time post and took […]

Lincoln launches structured product

Lincoln Financial Group is launching a new IFA product. The Staged Investment Plan will be linked to 11 trusts managed by fund managers: Goldman Sachs Asset Management and Delaware International Advisers.

InFocus - thumbnail

In Focus — February 2015

Jelf Employee Benefits looks at the issue of paying anaesthetist fees when the patient had no chance to discuss or agree to them prior to care; and provides recommendations for avoiding this scenario.


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