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TSLE2019: ‘Absolute no-brainer’ to cap second charge broker fees

  • 07/02/2019
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Packagers must be more transparent about the fees charged on second charge cases and bring them in to line with first charge mortgages, according to two master broker firms.


In a survey of attendees at The Specialist Lending Event 2019 at Sandown Park who had completed a second charge mortgage in the last year, none agreed with the fees their client had been charged.

One attendee revealed she had been quoted over £5,000 as a fee for a £150,000 loan.

This prompted Clever Lending and Crystal Specialist Finance to call on fellow distributors to stop “using smoke and mirrors” with their fees.

Clever Lending CEO Sam Kirtikar (pictured right) said he believes a cap on fees charged by master brokers is essential to help restore confidence for brokers recommending second charge loans to their clients.

Kirtikar acknowledged that a second charge should just be seen as a second mortgage but the industry had not had that transparency.

He agreed there was a need to understand what was being looked for in the fee structure to help reduce the cynicism about the market.

“I think it’s an absolute no brainer you have to cap fees,” he continued.

“We came out and capped our fees. On that size deal it would be less than 2%.

“Unfortunately, what’s happening is we’re trying to build that relationship but there will be cynicism out there because there are people who are using smoke and mirrors and not being transparent what they are charging for, so I totally agree with the stance,” he added.



‘Blows my mind’

Meanwhile, Crystal Specialist Finance managing director Jo Breeden (pictured left) found the fees charged in the sector “quite a shock” when the firm moved into the market last year.

“It absolutely blows my mind,” he told the audience at Sandown Park.

“Seeing people charge £3,000 on £10,000 loan, yes it includes some of the other overheads and costs, but it was quite a shock to me.

“The way forward is having a fee structure aligned to what many charge on a first charge mortgage – maybe an hourly rate charging bill, I’m not too sure,” he added.

But Breeden was adamant that the regulator needed to take a greater stand in the market and this would push compliance teams at networks and mortgage clubs to ensure brokers were considering second charges more regularly alongside remortgages.


The Specialist Lending Event 2019 continues next week with registration still open for the events at York and Liverpool.

They are being held at:

12th February – York Racecourse, York

13th February – Aintree Racecourse, Liverpool

More information and free registration can be found on the Specialist Lending Event 2019 website

Follow the coverage on #TSLE2019.


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