James Daley

By James Daley

The Council of Mortgage Lenders and Which? finally completed their work on making mortgage charges clearer this week – publishing a new model tariff sheet that lenders have been invited to adopt.

It’s fairly straightforward stuff – listing 22 different fees and charges, and explaining what they are and when they might be applied.

My first impression was that it’s pretty depressing that it required the Chancellor of the Exchequer to request the help of CML and Which? to get this to happen. It’s the least that a borrower should be able to expect from their lender.

Fewer fees

Now that we’ve got a clearer template, the next question is how many people will adopt the new CML template? The trade body says it has had commitments from lenders representing 85% of the market to sign up. But for some this will not just require a shift in documentation, it will mean a complete rethink of their charges.

Skipton Building Society is one of a number of lenders to have far more than the CML’s 22 fees and charges attached to its mortgages – it has an astonishing 34. It will be a leap in the right direction if it reduces these to 22. It’s perhaps a shame that the Which?/CML project did not whittle down the list even further.

What about total cost?

But the bigger omission from the CML/Which? piece of work is any signal of progress on the bigger challenge of helping consumers compare mortgages on a like for like basis.

Which? has long campaigned for lenders to present the total cost of their mortgages over the course of the deal period.  Its own research showed that most customers make the wrong decision when they try and compare mortgages – focusing on the interest rate, and failing to appreciate the impact of fees.

Cracking this problem was clearly part of the challenge set by the Chancellor, but sadly it appears to have been put on the backburner.

The CML tells me to watch this space – and has indicated that there may yet be more news on this in today’s autumn statement. Let’s hope it doesn’t get kicked into the long grass.