Although IF said it has no plans to alter any of its offset facilities for mortgages, some commentators believe that lenders are backing away from the offset market due to the complexity of illustrating the products’ details on key facts illustrations (KFIs).
Mike Fitzgerald, sales director at Brentchase Financial Services, said: “Lenders may be finding that this type of product is too complex. Giving a KFI on an offset mortgage may be difficult - it is up to the FSA to give a lead on this.”
Jennifer Holloway, head of media relations at Skipton Building Society, commented: “If you just look at the theory of it, illustrating how the mortgage is tied up with savings on an offset will be quite difficult to do on a KFI.”
Holloway went on to say that lenders could think twice about launching complicated products.
But Dominic Toller, head of marketing at Bristol & West, which has just launched a range of offset deals, said: “As our offsets have no charges it’s not hard for us to create compliant KFIs. But I can see how some lenders will find it difficult to produce these KFIs if their offset deals have numerous charges and drawdown facilities.”
Robin Gordon-Walker, spokesman at the FSA, said: “The KFI has been designed and refined after close consultation with the industry to accommodate and catch all types of mortgages.”
