The changes will see lenders use the same name for fees following research conducted by Which that showed many consumers found the existing range of names too confusing. Each lender will also list its fees in the same order, and use the same descriptions, to allow for easier comparisons between deals.
Trials saw consumers found the new system much easier to understand and to compare costs. Over 105,000 people signed up to support the Which campaign to put an end to fees across the financial sector that are hidden, excessive or make the total cost difficult to understand or compare.
Lenders representing 85% of the market have already committed to introducing the tariff and putting it on their website by the end of the year.
However, there may be continuing use of old terminology, with references in the tariff to explain when this is the case, until lenders have had the time to implement the new terminology more widely.
Any lenders with additional fees and charges not included in the standard tariff will make these clear separately.
Richard Lloyd, executive director of Which, said: “Thousands of people supported our call to end confusion around the cost of mortgages, so we are pleased that our work with the CML has resulted in simplified fees and charges.”
Paul Smee (pictured), director general of CML, said that lenders have successfully pulled together to put in place some sensible measures to consumer understanding.
Which and CML have submitted a joint report to Chancellor George Osborne outlining the work on the new tariff and progress towards making it easier for consumers to compare the total costs of different deals over different deal periods.
They plan to agree a standard comparison method early next year for lenders to adopt in 2016.
