Lenders with a limited product range will not have to offer advice on rivals’ mortgages under the MMR, the FSA has confirmed.
The final MMR rules, published last week, state lenders must offer advice on mortgage sales except where there are contractual or administrative changes made to a mortgage contract, such as amending the term, switching the repayment method or porting a mortgage.
Lenders with only a single product, or a limited product range, have argued it will not be possible to give advice, as they will only be assessing whether the customer has met their eligibility criteria. Other lenders were concerned that only offering a limited product range will mean they will have to advise the customer to purchase a mortgage from another firm.
The FSA says lenders with limited products will still be “steering” the customer towards a particular mortgage, so this will still be considered advice.
It adds however: “There is no requirement for the firm to advise on products offered by other firms.”
FSA director of conduct policy Sheila Nicoll says: “We are saying you have to be honest and if you only have one product and that is it, you have to say if it is not suitable.”