Upcoming Webinar: what is a green mortgage?

The Green Mortgage Advice Initiative (GMAI) brings you a new webinar: What is a green mortgage. The event takes place on Monday 29th July…

Important fee changes for mortgage intermediary firms in 2024/25

The FCA has released its policy statement on the Fees & Levies payable by regulated firms for 2024/25 – we pull out the important fee changes…

AMI secures significant win for the protection industry

We are delighted that the FCA has accepted our argument that the protection industry should be out of scope of the Advice Guidance Boundary Review…

Mortgage Vision returns for 2024 with extra locations

This year’s Mortgage Vision events take place across the country in September and October, with some new locations added for 2024…

AMI Consumer Duty Factsheets update

Regulated firms are required to bring any closed products and services they continue to offer into the scope of Consumer Duty by 31 July 2024…

Your June ’24 update from AMI Chief Executive Robert Sinclair

AMI Chief Executive Robert Sinclair gives his June update in what has been a quiet month for the industry with the upcoming general election…

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June 15 – What should an ERC be?

When AMI first reviewed the European Mortgage Directive text, we felt that the sense of the text meant significant change for UK lenders. We were surprised when the FCA indicated that they were not intending to change their rules.

AMI spends significant time looking at the rules that directly impact brokers, and less on the sections that are lender specific – such as the framing of an ERC. When we looked at the rules –

we saw their point, in that the FCA rules were very similar to the MCD requirements – what is different has been UK lender interpretation of them.

Therefore we expect there to be a change in the way most lenders operate their ERC policy over the next few months. We have seen some shift already, but we should expect more. As the rules indicate that the charge should reflect the real cost of breaking the contract, we could still see a flat rate for fixed terms up to 2 years. However for 3 year fixes and longer, we should expect to see tiered ERCs which reduce over the term of the loan. Any structure that does not reflect this risks being challenged, however it is a lender responsibility to ensure they are complying on this topic and is not part of any broker assessment of suitability.

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