The end of Product Switching??

Glover1862

Looks like the Mortgage industry are objecting to Mortgage Switching and now feel MMR is good for us, I wonder why???

https://www.mortgagestrategy.co.uk/product-transfer-sales-tactics-break-mmr-rules/

If customers don't like the deal being offer by their existing lender they are free to move, no one is forcing them to stay unless their circumstances mean they can't move and staying put is the best option. From reading this it seems the Mortgage industry are happy to apply MMR to Product switching so they can make a few quid, doesn't matter if a few are made homeless.

Some people are more than capable of making their own decisions and advice is available if required, trying to stop that is not on.

muhandis

I completely agree that product switching is great for people who don't need advice or don't want to go through the hassle of a remortgage or find that their existing lender has competitive rates or myriad other reasons.

Having said that, I'm not surprised that the mortgage intermediary industry is lobbying against product switching and prodding the FCA to act. I mean, what else would you expect them to do?

Mortgage intermediaries have had a few good years when they've been taking a bigger share of mortgage arrangements thanks to changes in the regulatory landscape, and now the lenders are fighting back with increasingly easy and early product switches so the broker doesn't get a chance to get in touch during remo time.

I guess it's all the cut and thrust of how business works and to be expected

Glover1862 wrote: »

Looks like the Mortgage industry are objecting to Mortgage Switching and now feel MMR is good for us, I wonder why???

https://www.mortgagestrategy.co.uk/product-transfer-sales-tactics-break-mmr-rules/

If customers don't like the deal being offer by their existing lender they are free to move, no one is forcing them to stay unless their circumstances mean they can't move and staying put is the best option. From reading this it seems the Mortgage industry are happy to apply MMR to Product switching so they can make a few quid, doesn't matter if a few are made homeless.

Some people are more than capable of making their own decisions and advice is available if required, trying to stop that is not on.

Westminster

I don't see how anyone can object to this point raised in the article

Ami says: “Customers face potential detriment as a straightforward product transfer does not always trigger a revaluation, affecting LTV, rate and affordability.

Look at the massive inertia of the wide-ranging and misplaced 'loyalty' people have towards switching to much better current accounts.

dunstonh

No issues with mortgage intermediaries. They can recommend product switch and lenders still pay them. However, the marketing of them by some lenders is not as clear and transparent as it would be on a remortgage and that can lead to unfair outcomes.

Verix

I don't think anyone in the mortgage industry is saying product switching is a bad thing in of itself. The issue is when it is being pushed on clients over an advised service, that creates a potentially dangerous situation.

Glover1862

dunstonh wrote: »

No issues with mortgage intermediaries. They can recommend product switch and lenders still pay them. However, the marketing of them by some lenders is not as clear and transparent as it would be on a remortgage and that can lead to unfair outcomes.

Only if the customers comes to them, a lot will just go direct who are already on max LTV, why take that choice away from them and make them face MMR. This is just self interest, nothing more.

getmore4less

Verix wrote: »

I don't think anyone in the mortgage industry is saying product switching is a bad thing in of itself. The issue is when it is being pushed on clients over an advised service, that creates a potentially dangerous situation.

being "pushed" is that not advice?

Glover1862

dunstonh wrote: »

No issues with mortgage intermediaries. They can recommend product switch and lenders still pay them. However, the marketing of them by some lenders is not as clear and transparent as it would be on a remortgage and that can lead to unfair outcomes.

It can also lead to the best outcome, i.e. The customer gets the amount of lending required within minutes without the risk of them not being not eligible under the MMR rules, why remove that safety net, how can that be good for them?