Brokers are calling for lenders to apply health warnings on mortgage deals that start low and then see rates rocket.
Research from Alliance & Leicester shows that 86 per cent of brokers think lenders should provide warnings.
FSA consumer research showed that 41 per cent of customers choose a mortgage on price but focus on initial payments rather than long-term affordability.
A&L head of intermediary mortgages Mehrdad Yousefi says: “Advisers and brokers are obliged under Mcob to provide advice and information on the consequences of taking out a low-start mortgage which rises sharply after a few years.
“Given that low start products were last really popular in the mid-to-late 1980s I don’t believe that this is a key issue in today’s market.”
Mortgage Intelligence managing director Sally Laker says: “I think extra warnings would help but it is not that everyone is doing a bad job on the advice process.”