Eight out of 10 intermediaries believe that a minimum standard benchmark for flexibility would be beneficial in helping their clients choose a flexible mortgage, according to research conducted by Sun Bank.
The study was conducted among a sample of independent mortgage advisers to find out whether they thought a benchmark standard was necessary and what criteria should be used in deciding such a standard.
96% of respondents felt that the ability to make overpayments and daily interest calculation are crucial in a flexible mortgage. A further 92% thought that there should be no overhanging penalties beyond any fixed period and no redemption fees at all with a variable rate mortgage. 92% also believed that underpayments and payment holidays should be standard, and 89% thought that a drawdown facility should be a stock feature on a flexible mortgage.
Chris Cummings, marketing director at Sun Bank, said: “The purpose of the study was to ask IFAs across the country if an industry standard would clear up confusion about flexible mortgages. Clearly this is an issue that needs to be addressed, as intermediaries need to sell flexible mortgages with confidence, and consumers need to know they are getting a truly flexible product. The findings will help us argue the case in seeking this benchmark.”
The results of the survey have now been passed to Members of Parliament and the Council of Mortgage Lenders for further input. Sun Bank is hoping that the results will form the core elements of a new benchmark standard for flexible mortgages.