Procuration fees

The level of proc fee for most purchase cases is around 0.4%. This net fee paid to the broker will depend on whether the firm is Directly Authorised or an AR of a network. Remortgage procs will also be around this level whilst PT proc fees will tend to be around 0.2%. The increasing amount of PT business, where this represents best value for the client, does have an impact on proc fee income although some of this can be made up from client fee's. However it is sometimes difficult to justify a client fee where a client can organise their own rate switch online so easily. Proc fees on more complex cases i.e. those where the client has suffered from adverse credit in the past or Limited Company Buy to Lets can be higher reflecting the higher level of work the broker would need to perform and the higher rates charged by the lender. Proc fees have remained consistent over the years and there is little incentive for the major lenders to raise these. This could be different for niche lenders.

We use a lot of specialist lenders who often have a higher proc fee, not by a lot, but every little helps! They havent really risen much for the last few years so maybe they are in need of a review, especially as brokers bring in such a huge % of the gross business.
A few lenders offer full Proc fee for PT's, but not enough. Up to 0.4% for high street, up to 0.6% for specialists and sometimes only around 0.15% for PT with some lenders. Is it worth it? If it benefits the client, yes!

Yes, proc fees vary between different areas of business. However, the exact figures can differ depending on various factors and often relate to the complexity of the case and the specific agreements between the parties involved.

When it comes to the alignment of proc fees, it's reasonable to suggest PT proc fees should be more closely aligned with standard purchase or remortgage cases. After all, the effort and work needed to recommend to a client is similar.

In a typical purchase or remortgage scenario, the proc fee stands at approximately 0.40% gross, whereas for product transfer (PT) cases, it hovers around 0.20%. However, it is imperative for proc fees to be better aligned and to accurately reflect the substantial volume of business that brokers generate for lenders.

The prevailing average procuration fee for mainstream lenders is currently 0.40% gross, exclusive of any deductions by networks or mortgage clubs. This also applies to remortgaging between lenders. However, specialist lenders and specific buy-to-let mortgages may entail higher fees, ranging from 0.50% to 0.65% gross. Mainstream lenders typically offer a 0.20% fee for product transfers, except for Halifax and some others who still provide 0.40% gross. Our firm has witnessed significant growth in product transfer business as clients aim to swiftly secure rates or face limitations in remortgaging. It would be great if lenders increase procuration fees for product transfers to show appreciation to brokerages for their loyalty and discourage them from seeking lending alternatives by transferring the mortgage debt to another lender.

Proc fees haven't really changed in years yet the administrative work involved by the broker has gone up. Lenders should seriously look at their procuration fees bearing in mind that they are saving a significant cost by not having as heavy a compliance workload on their shoulders.

Typically for purchases and remortgages procuration fees range from 0.35% to 0.50% dependant on the lender.

Other than Lloyds Banking Group - lenders across the board pay less for both product transfers and further advances. The argument historically has been that this is less work for the broker, a non advised sale and therefore attracts a lower fee.

However with both the FCA and all networks requiring that brokers check whole of market products before recommending a product transfer and this being an advised sale with the majority of documents required to be on file - how long can lenders maintain this stance?

The broker community is asked to maintain, service and advise their lending book - i think it is about time they paid a fee equal to that for a purchase for this work.