What is the Mortgage Switch Guarantee?
The Mortgage Switch Guarantee sets a higher standard of transparency for lenders, to make mortgage switching easier for borrowers.
The MSG was initially proposed by online mortgage broker Trussle to address key barriers to mortgage switching. The aim is for all three commitments in the MSG to be adopted by the industry as a whole. The proposal is being discussed with regulators and policy makers, as well the broader industry.
Whom will it help?
The FCA has recognised that two million households out of eight million with mortgages have lapsed onto their Standard Variable Rate. They are over-paying by an average of £4,5k a year.
These households are disproportionately likely to be poorer, less educated and with a higher portion of retirement-age occupants.
Has anything like the Mortgage
Switch Guarantee been adopted before?
Similar initiatives in energy and current accounts have been backed by government and industry. The Energy Switch Guarantee saves a household that switches around £300 a year whereas the MSG would help those on their SVR save over 10 times that.
What does the Mortgage Switch Guarantee
The MSG calls on lenders to:
- Show borrowers key mortgage information online, or via SMS messages
- Contact borrowers three months before their initial rate period ends, electronically & by post.
- Display the True Cost of a mortgage’s initial rate period.
What is True Cost?
True Cost sets out what the customer will pay over the initial term, taking into account any obligatory fees, charges or incentives in addition to the interest cost of the mortgage.
What Key Mortgage Information do we wish to be
available online or via SMS?
Over 70% of customers want easy access to their outstanding balance, mortgage statements, current interest rate, Standard Variable Rate and initial period end date.
Who is backing the MSG?
The MSG was proposed by Trussle, who are speaking to the industry, Government and the regulator to secure their support for this vital initiative.
How can I back the Mortgage Switch Guarantee?
As a homeowner, interested individual or a representative from the mortgage industry, show your support by signing up below.