The Council of Mortgage Lenders and Which? have launched a new “tariff of mortgage charges” that aims to make it easier for customers to compare deals by introducing a standard format for how lenders communicate their fees.
This follows a Which? campaign to clear up mortgage confusion, which saw Chancellor George Osborne wade in and ask the CML to see if it could do something about said confusion.
The new “tariff” has two main arms:
- Standard terminology: Different lenders will now use the same names for fees, as Which? research previously found consumers find the existing range of names for similar fees too confusing.
- Common format: Each lender will list fees in the same order, and with the same descriptions, to make it easier to compare between lenders.
The new tariff has been tested on consumers, and results show that consumers found it “much easier to understand and compare costs than when they used existing versions”. Lenders representing 85% of the market have already committed to introducing this tariff and putting it on their website by the end of the year.
Which? Executive Director, Richard Lloyd: “Thousands of people supported our call to end confusion around the cost of mortgages, so we’re pleased that our work with the CML has resulted in simplified fees and charges. 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.”
CML Director General Paul Smee: “Lenders have successfully pulled together to put in place some sensible measures to help consumer understanding. We very much hope that the new tariff and standard terminology will make it demonstrably easier to understand and compare mortgage costs. Working jointly with Which? has been invaluable.”
Download the “tariff of mortgage charges” template here (PDF)