Nationwide Building Society has come under fire from IFAs for introducing Cat standards across its range of new mortgages.
From May 1, all new Nationwide loans will meet the Government's voluntary minimum requirements, which insist on basic levels of flexibility, daily interest and for rates not to rise more than 2 per cent above the Bank of England's base rate.
But the move has been slammed by IFAs, who say borrowers can get better and more suitable deals with other lenders not complying with the Government requirements.
They say there is a deep misunderstanding of Cat standards among borrowers, who perceive them to be a Government-stamped guarantee of quality when they fail to offer the best deal for everyone.
The society has been criticised after claiming it is the first major lender to automatically move all existing borrowers from annual interest to daily interest.
Skipton Building Society says Nationwide's claim is “misleading” and says it was the first lender to introduce the move for new and existing borrowers in January last year.
It points to remarks made last month by Skipton chief executive John Goodfellow urging rival lenders to “drop double standards” and introduce daily interest for all borrowers.
Pretty Technical Partnership partner Kim North says: “There is a massive public mis-understanding of Cat standards, which are perceived to be a Government hallmark of quality but are certainly not appropriate for everyone.”
London & Country mortgage specialist David Hollingworth says: “Nationwide's existing borrowers will get a better deal than they were but the overwhelming message is that borrowers can get a better deal elsewhere.”