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&#39Cat loans will prove poor value&#39

Nearly half of mortgage brokers believe Catmarked mortgages will prove to

be poor value for consumers, according to the latest findings from TMB

Research.

The survey, commissioned by packager The Mortgage Business, shows brokers

are seriously concerned that the introduction of Catmarked mortgages will

have a detrimental effect on sales.

The news follows indus trywide concern that Catmarked mortgages may appear

to be endorsed by the Government when they are simply a benchmark not

suitable for all consumers.

The Government finalised plans for Cat loans last week, which include

forbidding brokers to charge for advice on any Catmarked mortgages.

Of the 100 brokers questioned in the survey, 56 believe that Catmarked

mort- gages would not benefit mortgage sales.

Many intermediaries felt Catmarked products could represent poor value for

money and would ultimately restrict the range of mortgage products

available.

Thirty-five per cent of brokers were more optimistic, believing the

introduction of Catmarked products would deliver benefits to clients by

helping them select the right mortgage.

Baxter Business Consultants partner Nick Baxter says: “I don’ think that

you can say Cats are going to be bad for sales but they will limit consumer

choice if they become the norm.

“But if the Cat debate raises the profile of the terms and conditions

attached to mortgages and this encourages consumers to consider more than

one element, then this will be good for the market.”

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