UK homeowners should be handed back £181m of easy remortgage commissions that have been earned over the past year, as brokers are not doing “anywhere near enough” to earn them, according to CashbackRemortgages.co.uk founder Suchit Sethi.
Sethi argued that remortgaging is “now so easy, brokers do little more than follow a script of questions, fill in some boxes and read from a screen”.
The firm is campaigning for brokers to come clean in relation to the amount of work and expertise that is involved in a remortgage, and wants the industry to make “shared procuration” fees the norm, which would see £181m put back in the pockets of UK homeowners over the past 12 months alone.
The procuration fee is usually worth 0.35 per cent of the value of the loan, meaning a broker would pocket £350 for arranging a £100,000 mortgage, £1,050 for a £300,000 mortgage or £1,750 for a £500,000 mortgage for what Sethi says is just “two hours” work.
“As much as it will make brokers’ blood boil, arranging remortgages is money for old rope. The public are led to believe they’re receiving sage counsel and complex financial advice but when it comes to earning their money from remortgages, brokers are often reading from a script,” Sethi added.
“Technology has revolutionised the industry to the point that remortgaging is little more than comparing a few variables among a small handful of products picked in a nanosecond by a computer. Complex financial advice it most certainly isn’t and so it’s high time brokers came clean and stopped hogging lenders’ commissions.
“Some brokers are earning as much per hour as a top London barrister for doing the absolute bare minimum. Such is the level of deception out there that many homeowners are even charged for the advice they are getting on top of the commission paid by the lender.”
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