Nigel Pamment, senior holistic planner at Inspirational Financial Management, needed to find a mortgage product with no ERCs for a client who wanted a quick completion and found an Abbey deal on Trigold, which fitted this criteria.
However, on closer inspection, he found the product had a remortgage clawback, which the lender admitted was a type of ERC, something which was not stated on the sourcing systems results.
Pamment said: “I don’t have a problem with lenders clawing back the cost of offering the client free legal and valuation fees within the first one or two years. However, my first question is why is it listed on Trigold as having no ERCs, and my second is has Trigold not got any safeguards against a lender stating that there are no ERCs? In my mind, a mortgage either has or hasn’t got them.”
Bill Safran, chief executive officer at Trigold, believed the issue could have arisen from confusion over how the product was presented.
He said: “Innovation in the market is such that we now have over 60,000 products from over 250 product providers and we are working even closer with lenders’ product teams to ensure every nuance of individual products are presented simply and accurately.”
Joe Wiggins, media relations executive at Abbey, said: “We have added extras such as free valuations and legal fees, but no tie-ins on our products so we think it is fair to ask the value of those extras to be repaid if the mortgage is moved within the time period of the deal. Adding all the extras together, it’s quite a large sum, so it’s not an ERC through stealth, but we have a wide range and we try and cater for all our customer’s needs and requirements.”
