End of confusing fees in sight as lenders agree to standard format.
Mortgage lenders have agreed to present their fees in a standard format, bringing to an end years of confusion for borrowers.
The Council of Mortgage Lenders and consumer champion Which? announced a new ‘tariff of mortgage charges’ which will introduce a standard format for how fees are presented.
This follows a campaign by Which?, highlighting how the numerous different ways that lenders refer to their fees had muddied the waters when it came to comparing mortgages and how much they would actually cost.
Now, not only will lenders have to use the same names for different fees, but they will also have to list them in the same order to help borrowers make a more informed comparison. Members of the CML, who represent 85% of the UK mortgage market, have committed to introducing the tariff and putting it on their website by the end of the year.
The CML and Which? are now working together on agreeing a standard way to compare mortgages, which lenders hope to adopt next year.
[SPOTLIGHT]Paul Smee, director general of the Council of Mortgage Lenders, 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.”
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What’s the problem?
For years lenders have got away with using all sorts of different names for the many fees they charge, which has made life incredibly tricky for borrowers who just want to know what the mortgage will cost them.
What one lender may call a mortgage fee, another may call an arrangement fee, while a third lender may instead prefer the term product fee. All of this just muddies the waters for borrowers. Hopefully this new standard tariff of charges will bring the confusion to an end.
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