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Broker has steam coming out of his ears

ended 21. July 2023

A Newspage broker has just emailed the news team here saying the following: “Steam coming out of my ears! I have just tried to do a Product Transfer for a client with the Coventry BS. Their system wouldn’t allow me to complete the switch so I called them for assistance. Their response was that the client's deal ends December 31st and they don’t allow switches until there are 4 months or less to go. So try again September 1st. My response was, yes but that all changed with the recent Government Mortgage Charter surely? Everyone signed up to it has changed to a 6-month period where clients can change, so as a major lender, are you not signed up to the Charter? Their response was, yes, we are signed up and fully aware of the wording of the agreement, which is “within 6 months” and we interpret that to mean anytime UP to 6 months is ok, such as our current 4-month rule. The explanation was reeled off without hesitation and in such a way that the question has clearly been raised before.” What are your thoughts on this?

7 responses from the Newspage community

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Stephen Perkins
Managing Director at Yellow Brick Mortgages
I'm not at all surprised by this. As commented at the time the charter was announced, it changed very little that lenders were not already doing, aside from the lack of impacting a credit file if changed back within six months. The wording was "up to six months" and not "at least six months", which it should have been. Coventry is not the only lender offering their rate switches less than six months in advance, but at least they do give us plenty of notice on pending rate changes.
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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
Coventry aren't the only lender that aren't allowing product transfers six months before. At the moment, Nottingham and Virgin are two we've recently seen who can only do it closer to the end date, four months in this case. The "up to 6 months" wording used in the Mortgage Charter seems silly in hindsight, as I'm sure the intention wasn't for a lender to only offer PTs the day before a fixed rate ends, for example. But this is something they could do and still be within the lines.
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Lincoln Brown
Managing Director at Larkbridge Mortgages
It may be frustrating to the adviser in question, however, the Coventry BS is totally within its rights to keep its Product Transfer policy to four months ahead of the current product ending. The wording from the Charter is that customers approaching the end of a fixed-rate deal will have the chance to lock in a deal up to six months ahead. They will also be able to manage their new deal and request a better like-for-like deal with their lender right up until their new term starts, if one is available. I'm certain not all lenders will feel a requirement to adapt their policy to six months if they believe their existing policy is fair and consistent.
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Russell Maggs
Mortgage & Protection Adviser at Maggs Financial Services
Whilst I understand the frustration, I would be looking to lock in a new fixed-rate mortgage elsewhere and reassess again when within the 4-month window. The goverment mortgage charter changes are still fairly new and it is understandable that smaller lenders may take time to follow the likes of the big banks who have more resources to integrate these changes through their systems and internal processes much more quickly.
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Keith Hood
Mortgage and Protection advisor at Warners Financial Services
This is so disappointing. What was the point of Coventry signing up to a Charter designed to help consumers at such a difficult time and then change nothing. Very poor. Let's hope they realise their error and change it pronto.
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Gareth Davies
Director at South Coast Mortgage Services
In all fairness, the broker should've realised they haven't changed to six months. Whilst not ideal, I cut them a bit of slack as a lender for sticking to their 48-hour rate change rule throughout the recent turbulent market. Take it on the chin and move on.
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Kirsty Wells
Director at Blueprint Mortgages & Protection
The Mortgage Charter has been perceived differently by lenders than it has by brokers I believe. Some lenders have been crafty and have read between the lines which then doesn't always have the customer's best interest at heart.
I read the Mortgage Charter 6-month rule as being able to choose a new product 6 months before the current mortgage rate ends, but Coventry and I believe some other lenders are still making us wait 3-4 months until the current product ends. In some cases, this is making customers very nervous as they want certainty and not have to wait. Some are inclined to do a remortgage instead and secure a rate 6 months before, but we then run the risk when the current lender does show the rates available if they are lower we could then need to cancel the remortgage and do a product switch instead and therefore creating double the work for mortgage brokers.