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‘Lenders should price mortgages to manage service levels and increase margins’ – Star Letter 18/09/2020

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  • 18/09/2020
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‘Lenders should price mortgages to manage service levels and increase margins’ – Star Letter 18/09/2020
Each week Mortgage Solutions and its sister title Specialist Lending Solutions select the top comments from our readers in our Star Letter section.

 

This week’s comment was in response to the article: Accord’s Duncombe on 90 per cent lending, capacity – and the cliff edge that worries him 

Stuart Phillips said: “I don’t really understand why lenders won’t use price to manage service levels. 

Lenders have been complaining for years about making no margin and have been managing affordability based on much higher interest rates anyway.” 

Phillips added: “An increased rate on 90 per cent products sends a clear message to clients about the risks involved and allows them to make informed decisions about whether to proceed, either by borrowing less, buying lower value homes or increasing loan terms.  

I think most clients would appreciate being able to make that choice themselves rather than blindly rolling the dice and creating this feeding frenzy? 

 

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