Following a Which? campaign to end the confusion around mortgage costs, the Chancellor asked the CML and Which? to work together to find ways to make it easier for consumers to understand and compare the costs of different mortgages with different lenders.
The new tariff will include standard terminology and a common format. Different lenders will now use the same names for fees and 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, said:
“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, 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. Working jointly with Which? has been invaluable."
