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Mortgage regulation faces APR shake-up

Self-regulation of the mortgage market is to be strengthened following Gordon Brown&#39s decision to force a uniform system of mortgage payment quotations.


Lenders say a uniform system of providing information will give borrowers more accurate information about repayments and prevent allegations of misselling.


They argue that the pol icy, to be enforced from April 2000, will strengthen the mortgage code and reduce the likelihood of statutory regulation.


The Department of Trade and Industry is set to enforce a uniform method of annual percentage rate calculation following a detailed investigation to strengthen the initiative in the wake of the Chancellor&#39s announcement.


It is understood the DTI will force lenders to calculate repayments on the assumption that mortgages will revert to the current standard variable rate when the fixed-rate benefit period expire. Currently, there is no standard method.


Scottish Amicable national mortgage manager John Malone says: “I believe these moves will lead to a far better self-regulated mortgage market.”


Council of Mortgage Len-ders press officer Sue Anderson says: “We really hope the DTI will enforce a uniform system of APR calculation because it is a move which is long overdue.”


The Chancellor, as widely expected, announced he was ditching Miras. Some lenders predict the move could hit economically depressed regions. Bristol & West general manager Richard Brown says: “It may only be worth £17 a month but to borrowers with a small mortgage this could have a significant impact.”

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