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Mortgage tariffs to be simplified by lenders | Mortgage tariffs to be simplified by lenders |
(about 7 hours later) | |
Banks and building societies are to simplify mortgage information, to help borrowers find the cheapest deal. | Banks and building societies are to simplify mortgage information, to help borrowers find the cheapest deal. |
The Council of Mortgage Lenders (CML) and consumer group Which? have jointly launched a new tariff, spelling out mortgage fees in a standardised format. | The Council of Mortgage Lenders (CML) and consumer group Which? have jointly launched a new tariff, spelling out mortgage fees in a standardised format. |
The move comes after Which? warned last year that people could be "paying over the odds" due to complex charges. | The move comes after Which? warned last year that people could be "paying over the odds" due to complex charges. |
Which? also said there were 40 different names for fees and charges in use, often for the same service. | |
For example an application fee - a charge for assessing and processing an application - could also be named a booking fee or a reservation fee. | |
The CML and Which? were asked by Chancellor George Osborne to work together on the new tariff. | The CML and Which? were asked by Chancellor George Osborne to work together on the new tariff. |
It has standard terminology, so lenders will in future use the same names for fees. | |
It will also have a common format, so that each lender will list fees in the same order, with the same descriptions. | It will also have a common format, so that each lender will list fees in the same order, with the same descriptions. |
'Easier' | |
Lenders representing 85% of the market have agreed to introduce the tariff and place it on their website by the end of the year. | Lenders representing 85% of the market have agreed to introduce the tariff and place it on their website by the end of the year. |
Which? executive director Richard Lloyd said: "This new approach should make it much easier for people to compare mortgage fees. We hope that all mortgage providers will make these changes as soon as possible." | Which? executive director Richard Lloyd said: "This new approach should make it much easier for people to compare mortgage fees. We hope that all mortgage providers will make these changes as soon as possible." |
CML director general Paul Smee said: "Lenders have successfully pulled together to put in place some sensible measures to help consumer understanding. | CML director general Paul Smee said: "Lenders have successfully pulled together to put in place some sensible measures to help consumer understanding. |
"We very much hope that the new tariff and standard terminology will make it demonstrably easier to understand and compare mortgage costs." | "We very much hope that the new tariff and standard terminology will make it demonstrably easier to understand and compare mortgage costs." |
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