Business

Mortgage tariffs to be simplified by lenders

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Banks and building societies are to simplify mortgage information, to help borrowers find the cheapest deal.

The Council of Mortgage Lenders (CML) and consumer group Which? have jointly launched a new tariff, spelling out mortgage fees in a standardised format.

The move comes after Which? warned last year that people could be "paying over the odds" due to complex charges.

Which? also said there were 40 different names for fees and charges in use, often for the same service.

For example an application fee - a charge for assessing and processing an application - could also be named a booking fee or a reservation fee.

The CML and Which? were asked by Chancellor George Osborne to work together on the new tariff.

It has standard terminology, so lenders will in future use the same names for fees.

It will also have a common format, so that each lender will list fees in the same order, with the same descriptions.

'Easier'

Lenders representing 85% of the market have agreed to introduce the tariff and place it on their website by the end of the year.

Which? executive director Richard Lloyd said: "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 said: "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."

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