"The Energy Switch Guarantee, introduced last year after more than a decade of lobbying and hard work, has already helped five million energy customers save an estimated £1 billion."
In a white paper published today, Trussle identifies several shortcomings in the mortgage market, including "a lack of uniformity and education around the pricing of mortgages" and inadequate communication from lenders when it comes to prompting customers to switch. It also recognises that a large number of borrowers are mortgage prisoners.
The paper outlines five initial recommendations for a Mortgage Switch Guarantee designed to address ‘switching inertia’:
- Standardising and simplifying the way mortgages are priced and presented to customers
- Improving lenders’ communication with customers when prompting borrowers to switch
- An obligation for lenders to offer new deals to customers who are ‘mortgage prisoners’
- A mandate for all mortgage brokers to have access to all deals on the market
- Modernising a range of slow and outdated processes when it comes to switching
Ishaan Malhi, CEO and founder of Trussle, said: “Millions of homeowners are collectively losing billions of pounds because switching mortgage isn’t clear or simple. The Mortgage Switch Guarantee will help put an end to this unfairness.
“We’ve spent the best part of a year speaking with thousands of borrowers and meeting with industry leaders from across the market to identify this ambitious but necessary set of standards. Thankfully there’s already consensus among senior industry figures that many aspects of the remortgage market are in need of improvement. But for the Mortgage Switch Guarantee to be a success, it will need to be widely adopted by lenders and brokers, and supported by regulators and government. We’ll therefore be speaking with and listening to feedback from these key groups in the coming months.
“The Energy Switch Guarantee, introduced last year after more than a decade of lobbying and hard work, has already helped five million energy customers save an estimated £1 billion. The impact of the Mortgage Switch Guarantee has the potential to be fifteen times greater, which is why we won’t be slowing down our efforts to deliver a fairer mortgage market for homeowners across the UK.”
Paula Higgins, chief executive, Homeowners Alliance, added: "Unquestionably, changes must be made in the mortgage market. The fact that two million borrowers are on their lender’s SVR cannot simply be attributed to borrower apathy and ignored.
"Consumers have seen huge upheaval in the mortgage market over the last ten years and with the hoops they have to jump through to meet affordability criteria now it’s not surprising many would be confused by or fearful of getting a new deal. The mortgage industry must address this by making switching to a better deal as straightforward and safe as possible.”
