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Accelerator loan sales tumble

Sales of accelerator mort- gages have plummeted since the Mortgage Code

Compliance Board claimed a year ago they were too expensive.

Accelerator mortgages encourage customers to pay off their loans early

with extra annual payments but borrowers can be hit with having to pay

thousands of pounds in fees.

Since the MCCB made its claims in a report a year ago, the number of

accelerator mortgages sold through intermediaries has fallen from 40,000 to

around 10,000.

The board claimed that accelerators were contra- vening the mortgage code

after sending out mystery shoppers.

The MCCB advises borrowers who want to pay off their mortgage early or

save on interest payments to talk directly to lenders about shortening the

term of the mort-gage or to consider switching to a flexible mortgage.

If consumers do take out an accelerator, the MCCB says they should pay

close attention to the level of fees and the training of the salesperson.

Chairman Colin Harris says: “Borrowers paying off their mortgages early

can often make financial sense but expensive accelerator products will

not always be the answer.

“A year ago, our research found some flagrant breaches of the mortgage

code in connection with accelerator mortgages, something we were not

prepared to tolerate.”

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