The way in whichlenders publish…or in some cases strategically avoid accurately publishing…their fee structures has been a sticking point for some time.
While there’s plenty of clear legislation outlining the way in which all financial service providers must be honest, transparent and not deliberately mislead the public, there’s really absolutely nothing out there that dictates how fee structures must be published and outlined. As such, standards vary exponentially from one lender to the next with some making considerably less effort than others to make it abundantly clear what kinds of charges their mortgage borrowers will be looking at.
Unsurprisingly, critics have been arguing for decades that this inherently leaves the door wide open to at least some level of abuse, or at least the provision of misleading information. But not for much longer, as by the time the year comes to a close, all major lenders are to begin listing and publishing their respective mortgage fees in a single, uniform and fully comprehensive manner.
Or indeed, that’s what’s being promised at least.
A joint initiative spearheaded by both Which? and the Council ofLenders (CML) generated enormous buzz among the financial community and the consumer public alike. Basically, the two groups got together to iron out a means by which a common standard could be ushered in for the benefit of all parties involved in mortgage borrowing. Along with enhancing efforts to increase overall clarity with the kinds of fees and charges attached to mortgage products, lenders are also to come together by using the same descriptions, names and terminology when referring to specific fees and charges. As it stands, any common charge or fee tied to a mortgage can be referred to by multiple names, which inherently makes things considerably more difficult for the consumer to understand.
The initiative is set to go into effect before the end of the year, which should see 2016 beginning with a new sense of clarity and openness for the mortgage borrower.
“We’re pleased that our work with the CML has resulted in simplified fees and charges,” said Richard Lloyd, executive director of Which? at the time the initiative was announced.
“This new approach should make it much easier for people to compare mortgage fees. We hope that all mortgage providers will make these changes as soon as possible.”
The move was fully explained during the 2015 autumn statement last week, during which Chancellor George Osborne took the time to comment on the importance of ensuring that all consumers and borrowers know exactly what they are getting into when looking to take out a mortgage.
“It is important that when people buy a house they are able to make an informed choice so they get the mortgage that is right for them,” said the chancellor.
“The CML and Which’s work is an important step forward and will make it easier for borrowers to choose the best deal.”
Calls continue for financial service providers in general to be bound by stricter rules and guidelines when it comes to publishing fee structures, including those working in the IFA community.