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Sun Bank in call for flexible loan probe

Sun Bank is calling for the Council of Mortgage Lenders to set up a working party to scrutinise flexible mortgages and decide on industry standards for the product.

The bank has written to the CML, saying clarity is needed for consumers and advisers.

Sun Bank believes many of the products on offer fail to live up to what it claims to be the six “generally accepted principles” for flexible mortgages among consumer groups.

These are daily interest calculations, overpayments, underpayments, payment holidays, lump-sum drawdowns and no early redemption penalties.

Sun Bank fears many consumers could be missold a product termed as a flex-ible mortgage because it incorporates only some of these features.

It says flexible mortgages should have all six of these features and products offering fewer than all six should be clear about what they do and do not offer so consumers are aware of what they are signing up for.

Managing director Mark Sismey-Durrant says: “Flex-ible mortgages are here to stay but they can vary widely on what they offer. We need to sort out a standard definition for the products before we get much further down the track.

“We think the CML will be sympathetic to our suggestion of setting up a working party to set the industry standards. It is not a new issue but it is one which seems to have dragged on without resolution.”

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