New mortgage rules introduced last week by the Financial Conduct Authority (FCA) will see mortgage advisers having to explain to clients why they were not recommended a cheaper mortgage.
Concerns from some respondents thought the change would see advisers focusing on price and not suitability of the mortgage.
The FCA commented that they didn’t agree that the changes would make advisers focus on price and is hoping the rules will allow more consumers to understand the mortgage market and how pricing works and challenge an adviser’s recommendation if necessary.
The FCA said: “Advisers must first consider the customers needs and circumstances and base their recommendation on this."
The Mortgage Market Study last year found that 30% of consumers could have found a better mortgage or once identical after receiving mortgage advice didn’t make a difference to the likelihood they had overpaid.
The FCA’s policy statement last week stated there were relatively few complaints made against mortgage advice in the UK and hopes that stays low under the new rules. Fewer than 8,0000 complaints were made in the first half of 2019 the FCA reported.
The FCA have confirmed it will carry out further research and supervision to assess the impact if the changes.