Coventry announced this morning that it will be increasing its rates. Free PR platform, Newspage, asked brokers for their thoughts and have shared them with IFA Magazine.
Amit Patel, Adviser at Trinity Finance: “It was inevitable that Coventry have increased their rates following the trend of other lenders who increased their rates throughout the week. Coventry has always given brokers ample notice when rates are going to increase. They are one of the better lenders in communicating important information to their brokers.”
Justin Moy, Managing Director at EHF Mortgages: “In line with other lenders, rate increases have been very common this week. I do like Coventry’s 48-hour notice periods, though, as it always helps when talking to clients about potential solutions, and it is an approach all lenders should adopt.”
Anil Mistry, Director and Mortgage Broker at RNR Mortgage Solutions: “It is not unexpected that another lender has chosen to emulate the actions of a few other lenders this week, likely in response to heightened swap rates. Nonetheless, it is admirable that Coventry Building Society provides brokers with a generous 48-hour advance notice before implementing such changes. This gives brokers ample time to prepare and submit applications, and may serve as a best practice for other lenders to consider adopting.”
Graham Cox, Director at Self employed mortgage broker SEMH: “There’s two factors at play here I think. The first is that swap rates rose steadily throughout February. The second is mortgage demand was low in January, which meant mainstream lenders were falling over themselves to offer the best deal, and cut rates accordingly. Other lenders have increased their rates this week, and Coventry is following suit. If they’d left their rates where they were, they’d risk being swamped by applications.”
Lewis Shaw, Owner and Mortgage Broker at Riverside Mortgages: “It makes such a difference to stress levels for brokers and clients alike when a lender gives a reasonable amount of notice, allowing you to place business without having a panic attack. Coventry is excellent at this, and we all appreciate it. However, now that we’re into another cycle of rising mortgage rates once again, we need to ensure clients understand the importance of getting the documents to us in a timely fashion. We ask for all documentation up front so we can act quickly when we get short notice, and it can make a big difference. For example, if a buyer takes a £250,000 loan over 25 years on a five-year fixed rate product, a 40 basis point increase in rate, which we’re about to see, means a buyer is paying an additional £3,357 in interest over the five-year product term. That is the difference organised documentation can make.”
Luke Thompson, Director at PAB Wealth Management: “What Coventry can be applauded for is that they always give plenty of notice of rate changes unlike other lenders. These rate rises are fairly commonplace at the minute. In my mind, lenders appear to be pricing in for future Bank of England base rate rises and Coventry are just following the market.”
