The bank said it has made the decision to cut brokers’ commission due to “margin pressure on buy-to let lending”.
On residential mortgages, Santander is removing the minimum procuration fee of £250. The actual procuration fee percentage paid on residential purchases will remain unchanged. The change means that the fee will now always directly relate to the value of the mortgage.
Graham Sellar, head of mortgages, said: “These decisions were made some weeks before the Bank of England’s base rate cut and the recent market turmoil.”
When buy-to-let rates were much higher than residential mortgage rates, the bank could offer brokers a higher proc fee but as the gap between rates has narrowed between residential and buy-to-let pricing, it could no longer offer 50 basis points.
The proc fee for buy-to-let will remain higher than residential mortgages which is currently up to 0.40 bps.
The changes apply to all appointed representatives and directly authorised brokers.