It is not surprising that the Central Bank has today just announced proposals aimed at increasing protections and consumer choices for mortgage holders. One need only look at the recent PTSB scandal involving tracker mortgage holders to see that an increased level of transparency and customer interaction is required.
The proposed measures fall under the following headings:
(i) a new requirement on lenders to prepare and publish a variable rate policy statement;
(ii) a new requirement on lenders to give information on alternative product options; and
(iii) a request for views on whether to increase the period of notice required to be given to a borrower before a variable rate is increased and to require lenders to provide the reason for the rate change.
Consultation opened today and the closing date for submissions is 12 February, 2016
Director of Consumer Protection, Bernard Sheridan, said: “Taking out a mortgage is one of the biggest decisions a consumer will make in their lives and it is essential that they can deal with regulated lenders with confidence, that the process is transparent and their interests are protected. In the case of variable rate mortgages, this means lenders must be clear with the borrower about the variable nature of the loan and the factors that might cause that rate to change. They should also give borrowers sufficient notice and information to enable the borrower to switch to a different product where they wish to do so.”