Each week we round up some of the most thoughtful, intriguing and downright provocative comments on the Mortgage Solutions site to select our Star Letter.
“While, I am a perhaps biased, the tide has turned as many lenders have realised it is cheaper to pay retention than process this in-house. The trial for Santander revealed it is better to pay and I suspect Accord will reach the same conclusion. Later this year, there are a few more non-top 10 lenders due to announce their schemes.
“This may lead one to wonder if Nationwide and Natwest are relying on the wrong data or whether it is simply core to their long term aims to maintain their current stance.
“Going forward, their isolation from the rest of the mainstream poses a few risks:
“1. With buy-to-let remortgages becoming more challenging I expect many brokers will be paying more attention to lenders’ retention strategies.
“2. Nationwide and Natwest may well find matching the best rates in the market will no longer be enough to preserve their market share, as brokers are likely to select the lender offering retention fees with all else being equal.
“3. If they do end up under-cutting on rates, will it really be cheaper to knock 0.1% off a two-year deal than pay 0.2% proc fees?
“4. Their other option is relax their criteria, but the risk-cost of doing so may also exceed 0.2%.
“We continue to live in interesting times…”