Mortgage lenders told to disclose tracker switch impact
Published 23/08/2010 | 13:38
Mortgage lenders were today warned to disclose the full implications of switching from a tracker rate to homeowners.
Financial regulator Matthew Elderfield has written to financial institutions setting out new measures to ensure consumers understand how a move to an alternative mortgage would affect them in the future.
The Central Bank and Financial Regulator confirmed a number of concerns were uncovered during an examination of switching practices.
It disclosed it was not always clear that if a customer moved from a tracker rate mortgage to an alternative interest rate - fixed, variable or other - that their agreed tracker rate or an alternative tracker rate might not be available again in the future.
"As a result of this finding mortgage lenders have been requested to fully disclose the impact of any switch from a tracker mortgage rate in all customer communications, with immediate effect," said the Central Bank in a statement.
"Customers must be notified that switching from a tracker rate may mean they will lose the ability to avail of a tracker rate mortgage in the future, where this is the case.
"Mortgage lenders have been advised to include new information in all customer communications regarding switches from tracker rate mortgages, for any reason, with immediate effect."