Currently, only the rental calculation is displayed, but with lenders either choosing to calculate using a nominal rate or pay rate, some have expressed concern that customers might end up with the wrong deal.
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Andy Wiggins, director of mortgage products at Mortgage Express, pointed out that two similar products could have roughly the same rates but much different rental requirements if one was on pay rate and the other on a nominal rate.
He said: “If you are on the sourcing system, it only shows the rental income calculation and if you only look at the rental cover then potentially you could end up with a worse mortgage. Most savvy brokers would do the calculation anyway but if you had a column showing it, it would save a lot of time.”
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Peter Wright, financial consultant at CBK, agreed:
“The problem with sourcing is that you don’t trust the rent figure you put in. I always put in more and then work it out manually.”
However, Mark Lofthouse, CEO of Mortgage Brain, said rents were calculated, but in a different way.
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“The reason we don’t do it the way described is that you are searching for the product and it won’t tell you if the rent is realistic.”
