In today's Budget the Chancellor has announced proposals to change confusing mortgage fees that can leave people paying over the odds.
As the progress report (below) details, Which? has been working with the Council of Mortgage Lenders (CML) to simplify the bewildering range of complicated fees and charges in the market. These changes should be in place by the end of 2015.
The report outlines the key proposals for change, which are:
- Introducing a common approach by lenders to make their "tariff" of fees and charges available to customers to avoid confusion and make it easier to find information about mortgage costs;
- Wider use of consistent terms to describe the same types of fees and charges that currently have an array of different names;
- Better explanations of whether fees are compulsory or avoidable and when they will be charged;
- Clearer ways of presenting information to help borrowers compare the cost of particular mortgage deals over specific periods, not just the upfront costs.
In July Which? and the CML will publish firm proposals and a timeline for implementation.
In good news for our Sneaky Fees and Charges campaign, Barclays has announced that it has simplified its mortgage fees.
Over the last 18 months Barclays has reduced the number of fees and charges on its mortgages from 21 to six.
The changes include:
- £150 withdrawal fee removed
- Final Repayment Charge reduced from £275 to £80 for new mortgages
- £25 charge for additional requests for information removed
- £100 arrears litigation and enforcement fees removed
- £150 further advance admin fee for new mortgages
Our research published last month found that there were more than 40 different fees and charges across the market.
We've been campaigning for George Osborne to make it easier for people to compare the cost of mortgages.
In a win for our campaign, the Chancellor announced in the Autumn Statement on 3rd December that he has asked the industry to work with Which? to develop new guidance on how fees should be displayed and charged. We will report back to the Chancellor within six months.