"This change sends a very strong message to the industry, and adds to the growing number of lenders now paying fees for retention. We expect to see this trend continue with more lenders following suit."
Its intermediary product switching service will pay a "competitive" proc fee for retention business, according to Virgin Money's mortgage director Peter Rogerson.
Rogerson said the firm would announce its fee next month, confirming that it would be "fair", but less than payment for new business.
The product-switching service will be supported by a new online system, which will allow brokers to compare deals at the end of a client’s mortgage term and submit product transfers for existing customers.
Jeremy Duncombe, Director of Legal & General Mortgage Club, commented: “The announcement that Virgin Money intends to pay a competitive proc fee to brokers for product switches is welcome news, as it recognises the increasing importance, cost effectiveness and quality of the intermediary channel for lenders. Legal & General Mortgage Club has been working closely with lenders on the subject of proc fees for years, so it’s fantastic that Virgin Money will soon be making payments that reflect the hard work which has gone into the service that brokers provide.
“This change sends a very strong message to the industry, and adds to the growing number of lenders now paying fees for retention. We expect to see this trend continue with more lenders following suit.”
