Brokers will receive less commission from Santander for mortgages with terms of five years or more after the lender brought its longer-term products into its quality-based proc fee structure.
The lender began paying networks commission – between 0.35 per cent and 0.4 per cent – based on business quality in July 2012 for products with terms of less than five years but continued to pay a flat 0.5 per cent for products with a term of five years or more. Directly authorised firms are paid a flat rate of 0.33 per cent for shorter-term products.
However, until 2 January, Santander paid both DAs and ARs 0.5 per cent for products with terms of five years or more.
But now DAs receive a flat rate of 0.4 per cent and ARs receive the commission they would get for products with a term of four years or less plus 5 basis points.
Buy-to-let is not affected and brokers still receive 0.5 per cent.
Chadney Bulgin mortgage partner Jonathan Clark says: “Santander has been on its own on this one because every other lender pays the same fee regardless of the length of the mortgage.
“While clearly it is bad news proc fees have gone down, I think clients would be uneasy with brokers getting much more for a five-year deal over a two-year one. This was inevitable.”