An intermediary, who wished to remain anonymous, said he had been contacted by the lender informing him of changes to the building society’s product structure. He said: “I had someone from Nottingham Building Society contact me, saying that it was looking to change the way its rates are structured, to a daily rate. It would be very significant if it changed it rates to daily interest, as, at the moment, its rates are always up near the best-buy tables. Because its rates are based on monthly, rather than daily, this could put some people off, and so it would make sense to switch and make it a more attractive proposition.”
He said the building society may see initial drops in profits, but would see business quickly pick up as a result of adopting the new rates.
“It may cost them a bit in profits at the start if they change the rate structure, but in the long term they will get more business and it will benefit everyone; brokers, clients and the building society,” the source added.
However, Rachel Slack, mortgage product manager at Nottingham Building Society, said the lender currently offers only one product on a daily interest rate, and had not yet finalised any other changes to its mortgage range. She said: “We have not changed from monthly to daily interest. We might be making some changes to our ranges, but these are not expected to be announced until around mid-to-late May this year. We are currently finalising what we intend to do with our mortgage ranges.”
