First Direct halves product fees but reprices rates
To account for the reduction in fees, the lender has repriced many mortgages, increasing the interest rate charged on some products by as much as 0.2%, while reducing others by up to 0.1%.
Nick Harrison, head of products at First Direct, said: “Customers have told us they would prefer fee-free or lower upfront fees with their mortgage so we are acting on this.
“There will be some rate changes to accommodate this, but it will help provide an even more attractive proposition to customers looking to remortgage or purchase their first home.”
The move reflects increasing consumer concern over inflation, as reported by Mortgage Solutions last week. The monthly ‘Spending Power’ poll from Lloyds – which sees Ipsos MORI survey over 2,000 adults with bank accounts across the UK – found that 65% of people reported feeling negative about current levels of inflation in July, compared to 60% in June, and just 41% in July 2016.
The research showed that concerns about affordability also peaked over the summer with 69% feeling negative about it in July. This was up by two percentage points on June and by seven per cent on July last year.
As a result, more borrowers are looking to minimise the up-front cost of borrowing.