First of all, I can agree with the letter’s sender that, as a small broker, it can be daunting to ensure that you are complying with all of the required font sizes and phrasing; doubly so when you see competitiors’ adverts that obviously are not prepared with such care and attention.
Secondly, why are brokers – or anyone offering multiple products – required to provide an average APR on their advert? Indeed, how does this help the client to make a decision? With a broker offering several thousands of products from dozens of lenders, an average APR is just a statistic. It offers no real insight for the client as to why they should or should not select a broker’s services.
If a lender is offering – indeed, leading – their mortgage promotion with a headline interest rate that is spectacular, but after fees and costs is not so wonderful, then yes, the average APR needs to be available for the client as part of their decision making process. But it only applies to that one single product – so as long as the APR is included in the Key Facts Illustration, the client will have the needed information.
Of course, realistically, the APR is only a useful tool for someone with no intention of ever changing their mortgage – surely a more useful piece of information for the client would be the total cost for the period they anticipate having the mortgage loan, for example, a two-year fix would be 24 monthly payments, plus all fees.
Stuart Turnbull
Best Advice
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