A new tariff has been introduced which will make it much easier for borrowers to compare the cost of mortgages.

A collaboration between Which? and the Council of Mortgage Lenders (CML) has produced a tariff which will make it easier to see how much a mortgage will cost, using simple to understand terminology and standard descriptions and formatting. The fees will be listed in the same order and will cover fees for the valuation, legal costs, application fees and the product itself. The tariff will be utilised by 85% of mortgage lenders in the UK. The director of CML, 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.”

The tariff will be adopted by lenders by the end of 2015. Mortgages in the UK are worth over 1.3 trillion, covering 11.1m mortgages. More work will be done by the groups to make it easier for borrowers to compare the APR for various mortgages over varying time periods. This should be in place by 2016. It is hoped that lenders will put the changes into practice as soon as possible, to make it easier for consumers. Mortgage advisers already have a comprehensive understanding of the different products and costs, as they have undertaken CeMAP training so they can provide advice.

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