The Council of Mortgage Lenders is to work with Which? to improve the transparency of mortgage fees.
In today’s Autumn Statement, the Government announced it has asked the trade body to work with Which? to make it easier for borrowers to choose the best mortgage deals.
The CML says it will work towards a set of measures that will aid transparency, understanding, and decision-making for consumers when considering the overall costs of different mortgages.
The CML says: “Although the FCA rules on the presentation and transparency of cost information are comprehensive, consumers do not always find the cost disclosure easy to understand.”
The trade body says the six-month project will consider the following issues:
- transparency and presentation of fees and charges to help improve consumer outcomes;
- standardisation of terminology around fees and charges;
- consumer education; and
- setting administrative charges so that they reflect the cost to the lender.
The CML and Which? have agreed to provide a progress report by the Budget in March, and a programme for future action to be taken forward through industry guidance.
CML director general Paul Smee says: “With the largest and most competitive mortgage market in Europe, UK customers are well-served for choice.
“We recognise that for this choice to bring the greatest benefit, consumers need to be able to understand and compare products confidently. We welcome the opportunity to work with Which? towards measures that can make this easier for them.”
Which? executive director Richard Lloyd says: “With so many people on tight budgets trying to get a foot on the housing ladder or looking to remortgage as rates rise, it’s essential that they can more easily find the best deal.
“We look forward to working with the CML to simplify the wide range of complicated fees and charges in the market so that borrowers don’t pay over the odds on their loan.”