Broker slams lender for pulling a product post-submission, leaving client facing a higher rate
Ongoing conflict in the Middle East has helped push up funding costs over the past month, prompting lenders to reprice rapidly as volatility in gilt and swap markets feeds directly into the cost of fixed-rate mortgages.
Many mortgage providers have also withdrawn products at short notice since early March, piling pressure on brokers who have been forced to re-broker cases and move borrowers to alternative lenders as quickly as possible.
One broker has now raised concerns that, in some instances, lenders may be pulling a product even after an application has been fully submitted—leaving the client facing a higher rate and the intermediary unable to switch lenders swiftly due to the complexity of some of the cases.
Tom Collier (pictured top), director at Bristol-based mortgage broker Advantage FS, said he recently experienced exactly that. He said one of the lenders he was dealing with changed terms after the application had progressed and fees had already been paid.
“On that particular case, the application was submitted in full and fees were paid,” he told Mortgage Introducer. “The lender then withdrew the product post-submission and offered the client considerably higher rates.”
According to Collier, the case was complex, and both adviser and client had worked hard to ensure the full application was completed in time—believing that would secure the rate. “Or so we thought,” he said.
“Given the complexities of the case, we cannot pivot easily to another lender,” Collier explained. “The client is understandably very upset to have lost a rate; it could also strain our relationship with the client, as the adviser mentioned that applying secures the rate. Thankfully, the client knows how the industry works and knows that this is not ‘our fault’.”
Collier described the lender’s move as highly unusual, even in periods of market stress, and said the only similar example he could recall dated back to early 2020, as pandemic disruption began to filter through.
He said the lender attributed its move to external shocks. “[They] have understandably blamed the current geopolitical situation for the move,” he said. “This is not an acceptable reason in my opinion. No other lender has done this.”
However, Karina Hutchins (pictured right), acting director of mortgage policy at banking and financial services trade association UK Finance, said lenders are within their rights to withdraw an application at any point before a formal offer is issued.
“Although a very rare occurrence, a mortgage lender can withdraw a mortgage application as it’s not legally binding until it reaches the mortgage offer stage,” she explained.
Hutchins also acknowledged that “the ongoing uncertainty in the Middle East is causing volatility in mortgage pricing”, contributing to a wave of deals being repriced or withdrawn at short notice.
Even so, she stressed that best practice is for lenders to keep brokers fully informed of product changes and to give them sufficient time to respond. “To help, we have seen lenders commit to minimum notice periods before withdrawing products to give more certainty to brokers and their clients,” Hutchins said.
As volatility continues to ripple through lenders’ pricing models, Collier’s experience underlines how exposed borrowers and brokers remain to sudden market moves—even after significant work and cost has been sunk into an application.
Brokers insist that clearer communication, consistent notice periods and stronger protections against post-submission product withdrawals would go a long way to preserving trust at a time when affordability is already stretched and confidence is fragile.
“I hope that the broker community can come together on this type of activity to stomp it out once and for all,” Collier said.
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