It also revealed research that showed more than half (56%) of first time buyers and mortgage-holders did not know what APR stood for.
The website - www.mortgageslaidbare.info - brings together for the first time FSA mortgage tools and resources. The tools include budget calculators that will help consumers work out how much they can afford to borrow and how much a mortgage will cost them each month; mortgage tables that give consumers a list of what mortgages are available on the market to help them shop around and a 'Firm Check' service so consumers can check that the firm they are dealing with is authorised.
The consumer research commissioned by the FSA on what UK mortgage holders and first time buyers knew and felt about buying a mortgage showed:
- 56% of first time buyers and mortgage-holders did not know what APR (annual percentage rate) stood for;
- 52% of mortgage-holders did not know what their current APR was;
- 36% of mortgage-holders did not understand at least half of their mortgage product literature;
- 65% of first time buyers felt daunted by buying a mortgage
- 76% of first time buyers would like access to more impartial information about mortgages.
This work coincides with the first anniversary of regulation of the mortgage industry by the FSA. In the last 12 months, the FSA has carried out a range of consumer-focused work, including the introduction of keyfacts documents to help consumers understand the service being offered and the cost and features of the mortgage; research into the quality of advice given on equity release mortgage sales; and the quality of mortgage disclosure documentation.
To promote the FSA's free tools and resources the city watchdog is running a national and online advertising campaign with a 'naked' theme to show the world of mortgages 'laid bare'; stripped of jargon. This is the first phase of a new £1.5 million consumer campaign with further activity planned for the new year.
