"How is it even possible that such vastly incorrect information can be shared on one of the UK's largest consumer reference sites?"
Brokers have highlighted incorrect content around interest-only mortgages on comparison website, Compare The Market.
Following the headline: “Should I overpay if I have an interest-only mortgage?”, the website responded: “You'll have to weigh up overpaying an interest only mortgage very carefully as it has few advantages. With an interest-only mortgage any overpayments won't be paying off the capital like it would with a repayment mortgage - this has to be paid in one go at the end of the term, So you won't be reducing the amount owed, which means your overpayments will have little effect. Instead you might want to consider boosting whatever savings or investments you've chosen to meet your capital payment at the end."
The content was identified by Steven Morris, director at independent mortgage broker, Advantage Financial Solutions, who shared his thoughts on LinkedIn and explained why the copy is incorrect to Newspage: “This is just factually incorrect. Interest-only mortgages are as they sound, where only the interest for borrowing the money is charged. This interest is paid using the monthly direct debit. Therefore any additional payments can only come off of the mortgage balance owing. Where else could the money possibly go? If you overpay and, say, halve your mortgage balance, you are then being charged interest on a balance half the size, resulting in half the payment. In the words of a certain famous meerkat, simples.”
Hannah Bashford, director at Model Financial Solutions, said: "I’ve had to re-read this several times to see if I can make any sense of it, but it would appear whoever wrote this has no idea how overpayments work. This is factually incorrect and should be revised immediately and replaced with a description of interest-only mortgages by someone who knows what they’re talking about."
Luke Thompson, director at PAB Wealth Management, said the content could prove extremely costly to consumers: “This is why you need a mortgage adviser and shouldn't try to do everything yourself by using these websites. Put bluntly, it's wrong but a layman on the street will potentially take this as gospel as it is posted on a big website that should have quality control measures in place. If someone with an interest-only mortgage took this 'advice' at face value, it could end up costing them thousands of pounds.”
Craig Fish, director at Lodestone Mortgages & Protection, commented: “How is it even possible that such vastly incorrect information can be shared on one of the UK's largest consumer reference sites? The 'expert' responsible for those comments should have their adviser license removed, that is if they even have one. The FCA needs to clamp down on this quickly because many thousands of UK consumers, unfortunately, look to these places for information and advice, and to be fed such false information is a punishable offence.”
Stephen Perkins, managing director at Yellow Brick Mortgages, said: "I am not surprised by this, given such websites are using experts who are largely unqualified to give advice and therefore giving incorrect information. How these large companies sign off such financial promotion and content given the approval processes brokers have to go through is baffling. The FCA needs to ensure that advice given on large platforms such as these is compliant and accurate, especially given the influence they have. The lesson here is to get real qualified experts to write your content."
Michelle Lawson, director at broker, Lawson Financial, described it as “disgraceful at best”. She continued: "For a huge and 'trusted' consumer platform such as this to have such inaccurate information is frightening and highlights further the need for advice rather than information. Various industry commentators champion these sites, but are they checking who they champion? Hopefully action will be taken to ensure this is corrected and communicated, however it is impossible to tell how many people will have taken onboard this error."
Rohit Kohli, operations director at The Mortgage Stop, was surprised the content got through compliance: “How did this get through any sort of due diligence or compliance checks? It smacks of someone using some sort of AI to create some content and then just throwing it out there. If this had been from a smaller firm I can almost guarantee there would be consequences. As it's one of the big players, we know nothing will happen.”
Ross McMillan, owner at Blue Fish Mortgage Solutions, was worried about the impact on consumers: "What makes this misinformation so startling and scary, is that sites such as these are considered a reliable source for a huge swathe of the general public. Even though they are largely simply affiliate-based corporate machines, the status of sites such as these with the general public means it's frankly a disgrace that they haven't had the responsibility to do a basic sense check of their content. Perhaps it's time for them now to consider featuring a ‘What our guy down the pub says’ article instead, as based on the evidence of this article, they may actually get more sense."
Justin Moy, managing director at Chelsmford-based EHF Mortgages, said this highlights why articles about regulated products should only be written by qualified industry experts: “It's disappointing that this level of misinformation is promoted on some of the most influential websites with a huge audience. Almost every mortgage lender allows for overpayments, and they will either take effect immediately or within the month, thus reducing the mortgage interest payments. Who has read that article and made a financial decision that is wrong? Articles about regulated products and services, such as mortgages, insurance and investments, must be thoroughly checked and, perhaps more importantly, written by qualified industry experts who understand their subject rather than relying upon AI, or unqualified journalists, to make statements that are certainly giving some level of advice to people.”
Compare The Market has been approached for comment and the page in question has subsequently been removed from the site.
