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TSB adopts ESIS ahead of MCD deadline

  • 09/03/2016
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TSB adopts ESIS ahead of MCD deadline
TSB has decided to use the European Standardised Information Sheet ahead of 21 March when the Mortgage Credit Directive (MCD) comes into effect.

The lender has also confirmed that it will be lending to consumer buy-to-let customers but is not offering foreign currency loans.

MCD rules dictate that lenders are obliged to adopt either an enhanced version of the KFI or ESIS documentation by 21 March. The majority of lenders have so far opted for the KFI plus, with Halifax, Skipton Building Society and Natwest among those adopting the ESIS.

TSB will also allow a 10-day reflection period, which can be waived by the customer, allowing applicants time to reconsider or amend their mortgage offer if needed.

The Annual Percentage Rate (APR) will be replaced with the Annual Percentage Rate of Charge (APRC). Depending on the type of mortgage being applied for, TSB’s documentation may also include a second APRC, to demonstrate how interest rates have varied historically, enabling customers to make an informed decision on the ability to repay over the mortgage term.

Amendments have also been made to TSB’s online system to include questions that determine the regulated status of an application. The questions will then determine whether the application is residential, consumer or business buy to let.

Legal and General has also updated its MCD matrix to include the plans of Natwest, National Counties Building Society and Platform.

Jeremy Duncombe, director, Legal & General Mortgage Club said: “There are several changes to the advice process that are listed on our MCD Matrix, and only those brokers who have familiarised themselves and worked these changes into their business processes can consider themselves fully prepared for the new rules. Our latest update adds to our matrix of data on lenders of all sizes which will help advisers prepare for the approaching change in regulation.”

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