Brokers have criticised NatWest for dual pricing, offering a sub-5% mortgage rate direct to consumers — available online on an execution-only basis — which was not made available via brokers.
Sources told Newspage the move was “short-sighted and in bad taste” given that “this is a time when people need advice the most.”
They also questioned whether dual pricing should be banned, particularly under the new Consumer Duty regulations.
The deal is a 60% loan-to-value (LTV) 5-year fix, with a 15 basis point difference between this and the cheapest option brokers have to offer at 5.14%, excluding green mortgages.
NatWest was approached for comment prior to publication.
Response:
Riz Malik, founder and director at R3 Mortgages:
“Is Natwest really rewarding people for not taking advice in this day and age?
“Considering that this is a time when people need advice the most, I find this tactic short-sighted and in bad taste.”
Craig Fish, director at Lodestone Mortgages & Protection:
“Really? I thought we had moved beyond this underhanded tactic nowadays. NatWest you should know better.
“When you consider that most mortgages are sourced via the broker channel, I’m not entirely sure what NatWest is trying to achieve.
“Furthermore, considering they are closing branches across the UK throughout 2023 and 2024, do they honestly think they could handle the demand from the customer?
“Dual pricing has to stop, and the regulator needs to do more.
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“Dual pricing should be banned unless our lender partners are seeking to cause unrest with brokers.
“If they can offer it directly, they can offer it via intermediaries, so it’s nothing but a cynical ploy to undermine the usefulness of brokers.
“In such instances, it’s crucial that brokers stick together and send a clear message to lenders that this behaviour isn’t acceptable.
“Moreover, the FCA wants consumers to receive advice when taking out a massive amount of debt linked to their most valuable asset for over 25 years.
“So how does this fit with Consumer Duty and preventing foreseeable harm when many consumers are unaware of the implications and most won’t truly understand the protections they’re giving up when selecting an execution-only product?”
Darryl Dhoffer, mortgage expert at The Mortgage Expert:
“So the dark arts of dual pricing is raising its head again.
“Appreciate lenders have loan books to fill, but these practices are not acceptable.
“Lenders need to remember that nearly 90% of all mortgage business written is by intermediaries, in case they need reminding.”
Peter Stamford, director and lead adviser at Moor Mortgages:
“This practice can not be allowed to continue, otherwise our industry will have to take aggressive action against NatWest to protect itself and our customers.”
Graham Cox, founder at Self Employed Mortgage Hub:
“Dual-pricing should be banned.
“It’s unethical not just for brokers but consumers as well, who should reasonably be able to expect the rates a broker sources to be the best available in the market.
“Just another example of banks acting with impunity.
“It’s high time the regulators bared some teeth.”
David Walsh, director at Kite Mortgages:
“It doesn’t make sense that dual pricing should be allowed when considering the consumer.
“It wouldn’t stop me from recommending NatWest if it was the best option for the client. You can’t penalise clients based on your ill feelings towards a certain lender.
“No, the continued dialogue is what is required, to ensure the best outcomes for clients.”
Ranald Mitchell, director at Charwin Private Clients
“This is a disgusting practice that NatWest have been guilty of in the past. They are not alone.
“They send their representatives around our businesses with the message, “We value brokers” and then continue to undermine the crucial service brokers offer with cheaper rates directly.”
Steven Morris, advising director at Advantage Financial Solutions:
“This is awkward as, of all lenders, we have perhaps the best relationship with our Natwest BDM.
“But yes, this is a phenomenally short-sighted and amnesic tactic that arrogantly sticks up two fingers to the relationship with brokers.
“Sorry, Natwest, who provided you ALL that business during the recent market boom? Around 75% of it, if I have my numbers right? Ah yes, us brokers. Dingbats.”
Scott Taylor-Barr, financial adviser at Barnsdale Financial Management:
“It’s always very disappointing when someone you see as your business partner goes behind your back like this.
“Over 80% of all new mortgage business is generated by brokers, so lenders are very dependent on the intermediary channel, however, they also know that we are very unlikely to not recommend our clients a NatWest mortgage if it is the best overall deal for them – essentially using our own integrity against us.
“The worst part of dual pricing though is when a prospective client comes to a broker and gains all their knowledge and insight, then having been navigated through the hundreds of mortgage options to conclude that a certain lender is the best fit for their needs, only to lose the business as the lender offered a cheaper deal via their direct channel.”
Adam Smith, founder at Alfa Mortgages:
“The concept of dual pricing appears incongruent with our commitment to Consumer Duty.
“It raises questions about the fairness of our offerings to clients, as rates differ depending on whether they engage directly or through an intermediary.
“This practice may inadvertently disadvantage financially inexperienced clients who choose the execution-only route, potentially exposing them to unnecessary risks.”
Scott West, director at Propertyze Consulting Limited:
“It would be unusual for a lender as large as the RBS Group to so brazenly cut brokers out, especially considering the product whilst marginally cheaper, isn’t otherwise unique in other features.
“Consumer Duty and TCF are hot topics at the moment, and certainly ones that Natwest would be taking seriously.
“The dual offering doesn’t fit with the TCF guidelines as the product doesn’t appear to be sourced with research software.
“Consumers using a broker won’t even have the opportunity to be informed of a product that isn’t made available to research software.”
Michelle Lawson, director and mortgage and protection adviser at Lawson Financial Ltd:
“We have to be careful with this as many lenders have dual priced and ever since I can remember – not saying this is fair though and surely breaches Consumer Duty.
“Sometimes, this has been in the brokers’ benefit with better products or exclusives available through brokers only.
“There will have been instances in the past where customers go direct to a lender, don’t get any whole of market advice and don’t get the best product.
“The options are there for any customer to research their mortgage how they wish however the broker route will assess their criteria, the best option for them at the time and, more importantly for now where the rates are reducing, review the product rate and change this to a better one should one be released.”
