UK Finance has announced that together with the Building Societies Association and the Intermediary Mortgage Lenders Association, it has agreed common standards to help existing mortgage borrowers on a lender’s reversion rates to switch to a better deal in certain circumstances.
The cross-industry commitment follows the FCA’s Mortgage Market Study interim report, which identified a small portion of borrowers who on a reversion rate, are up-to-date with repayments and would benefit from switching to a new deal but cannot do so.
The commitment only applies to customers of lenders that can offer alternative products to their existing borrowers. Certain other conditions and exclusions apply to the standards. UK Finance also stated that a number of lenders have already signed up to the agreement and that it expects more lenders to commit over the coming months.
In response to the announcement, the FCA published a statement welcoming the initiative and stating that it would work closely with the industry to discuss the detail of the arrangement and monitor the impact it will have.