Ian Crampton, sales director at Ferndown Ltd, explained that the abundance of products on the market was making life increasingly complicated and time-consuming for brokers.
He highlighted the recent product launch by Nationwide Building Society offering borrowers the choice of a no reservation fee.
He said: “When the FSA began regulation one of its aims was to streamline products and endorse transparency but this seems to have gone by-the-by and caused greater confusion for us, the brokers, and also the borrowers. It seems that lenders are using this as a way to offset their increasing fees.”
Paul Hearnden, managing director of My Mortgage Direct, said: “Halifax and Northern Rock already offer similar deals. It’s like a double-edged sword; it’s a positive step that lenders are listening to the industry regarding fees but it adds to the broker workload and is increasingly confusing for the unsophisticated borrower.”
The Nationwide has launched the payment option on its fixed and tracker mortgages in order to give the borrower the choice of paying the reservation fee up-front or paying a slightly higher rate over the deal period and having no reservation fee to pay at all.
Stuart Bernau, executive director at Nationwide, said: “At Nationwide we listen to our members and understand that while they like our low rates, sometimes they cannot or do not want to pay an up-front fee.
“This is why we’re introducing the new reservation fee option. The popularity of our mortgage flexibility, such as the opportunity to overpay and take payment holidays, tells us how much borrowers value this choice, enabling them to manage their mortgage in the way that best suits them.”
