More and more lenders are announcing they are cutting rates but are not actually revealing those cuts until the next day, frustrating brokers.
Free UK news agency, Newspage, sought the views of brokers on this practice. One described it as a “pet hate”, another said it’s “a matter of trying to grab headlines and PR”, while a third said simply: “24 hours’ notice that new interest rates are to be released but brokers haven’t got a Scooby what those rates will be. Where’s the sense in that?”
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Andrew Montlake, managing director at Coreco:
“This is definitely a frustration and a pet hate of mine. In today’s market where there are a whole host of rate changes, often quickly, it is our job to help manage clients’ expectations, and knowing what rates are actually changing to is really important.
“If a lender has made a decision to change then they will already know what the rates are going to be so it makes sense to publish the new rates at that time. It may sound like a little thing, but this type of tweak can really help brokers and more importantly, our clients.
“Clear and concise information is imperative in a Consumer Duty world, and lenders need to make sure that good communication and partnership with the broker community meets the very highest of standards, so consumers get the right information at the right time.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“The announcement of reductions without specifics is just a matter of trying to grab headlines and PR whilst also giving the flexibility to decide the actual rates later after some competitors have made their counter-moves.
“The issue is that an announcement of rate cuts in itself adds no value to brokers, as this does not allow them to assess whether such reduced rates are worth delaying a client’s application to obtain, and if the reduction details are minimal or disappointing when finally revealed it is even more frustrating.”
Darryl Dhoffer, mortgage expert at The Mortgage Expert:
“Some lenders do this all the time. 24 hours’ notice that new interest rates are to be released but brokers haven’t got a Scooby what those rates will be. Where’s the sense in that? Maybe lenders will give the same 24 hours’ notice before they pull the rug on products when rates are rising? Then again, there’s more chance of the sun rising in the west.”
David Stirling, independent financial advisor at Mint Mortgages & Protection:
“This is yet another case of smoke and mirrors from lenders that prevents brokers from getting their clients the best deal. So a client mid-application or gathering their supporting docs is in complete limbo as to which lender they are ultimately going to be recommended to, which isn’t exactly treating customers fairly by the lenders.”
Elliott Culley, director at Switch Mortgage Finance:
“Ideally, it would be good to know what the rates will be and some lenders do this and some don’t. We don’t know what happens behind the scenes and how the lenders fund the latest tranche of products and for some it may be a tactic to not commit to a rate so they can be as competitive as possible on the day of release.”
Scott Taylor-Barr, financial adviser at Barnsdale Financial Management:
“This grinds my gears mainly because you know the lender sending the email has already decided on the new rates 99% of the time. My other pet peeve is getting an email telling me there are new rates, but rather than say “the changes we’re making are…” they just give a link to the product page of their website, leaving you to play spot-the-difference between their new rate guide and the previous version. None of these things are life-or-death issues, I admit, but they are two small things that lenders could change to help make their broker partners’ lives that little bit easier.”
Michelle Lawson, director – mortgage & protection adviser at Lawson Financial Ltd:
“When lenders do this we are effectively trying to sell a secret. As brokers, we try and manage our diaries effectively. We are currently in good times as rates are generally reducing, however significantly more of our time is spent doing rate changes to benefit our clients. I have fed back to many a lender that they should let us know about rate changes and what those changes are in one, which keeps it simple. I don’t want to be wasting valuable time hunting around just to increase lender web traffic.”
David White, chief operations officer at Simply Lending:
“It’s a damned if you do damned if you don’t situation. If a lender gave no warning at all they’d be getting more complaints than a Piers Morgan talk show, but not knowing how significant the rate reduction is does put you in a state of limbo. Several lenders have indicated to us that their rates are coming down imminently without disclosing the numbers at which point communication with the customer is equally as important as that between the lender and broker.
“An open conversation about the pros and cons of holding out on the submission of an application should always lead you down the correct path. I have sympathy with lenders on this subject as this is delicate information and they can’t risk leaking the wrong number, but a little more transparency would be well received.”
