AMI calls out lenders’ unclear product transfer practices


The Association of Mortgage Intermediaries is calling out consumer harm coming from lenders’ lack of transparency around product transfers.

In its quarterly economic bulletin, AMI said product transfer gross lending was now £80bn to £100bn, around a third of all mortgage lending, but that lenders refuse to say exactly how much.

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

“If regulation encourages shopping around by customers in general insurance and annuity markets, will the market study into competition in the mortgage market ignore or acknowledge the potential customer detriment caused by continuing to allow lenders to bury product transfer lending volumes without full disclosure?”

The trade body said that lenders are investing heavily in technology that simplifies the remortgage process.

However, AMI adds that this investment is designed to make it easier for the customer to take out an execution-only product transfer.

AMI said: “It is right that customers should have choice, but it is definitely not right that both regulators and the industry should be unable to see how many customers are encouraged to opt for a product transfer to a rate or terms that might not have been recommended to them by an independent adviser.

“The ongoing refusal of lenders to disclose the volume of lending done on a product transfer basis is opaque at best and highly questionable at worst.”