Autumn Budget 2018: Mortgage fee transparency must improve
Ishaan Malhi (pictured) is chief executive of Trussle
With Brexit uncertainty dominating, it’s all too easy to downplay the impact of the Autumn Budget on consumers. But this year, more than ever, we need the government to put focus to the issues affecting everyday Britain and help households faced with soaring costs and intense budget pressure.
Still not enough is done to ensure the financial services sector makes it easy for consumers to understand the fees and charges of the products they pay for. This is why we’re calling for the government to return to their commitment to working with industry sectors to improve mortgage fee transparency which has not been progressed since 2014. It begins with ending the ‘loyalty penalty’ that means so many customers can be charged more than they should be.
Customers should be allowed to switch more freely to new deals without undue barriers, ensuring they’re not overpaying and instead freeing up money, which would help to create a better future for millions of families. We also need to push for providers to display the true cost of any product as standard so it’s easy to understand associated fees and incentives with a mortgage over time.
This transparency is needed in order for borrowers to feel educated about the products they’re choosing. Empowering borrowers with the right knowledge will ensure they take into account the overall cost of a mortgage deal, including how much their mortgage balance they’ll be left with after the initial term, and this is key to enable them to make the right decisions for their own circumstances.
This must sit alongside efforts to bring the mortgage industry into the 21st century by mandating that lenders make statements accessible to customers online and communicate to borrowers three months before the end of their initial term ends using digital communication alongside mail in order to make them aware that it’s time to review their deals.
While past Autumn Budgets have rightfully helped people onto the property ladder, a real focus needs to be on today’s homeowners to make sure no one pays more than they have to.