On the 23rd August, the Financial Regulator published the findings of an examination of switching practices related to tracker mortgages by mortgage lenders and relevant customer communications. A number of concerns were identified during the examination about the level of disclosure and transparency when consumers moved from tracker rate mortgages to other forms of mortgages. The Regulator has written to all mortgage lenders detailing the findings from the examination and outlining a number of new measures to be introduced immediately to ensure consumers fully understand the implications of switching from a tracker mortgage. Issues identified are subject to separate supervisory engagement with individual firms.
The examination revealed that in some cases, the implications of switching were not fully explained to the customer and that it was not always clear that if a customer moved from a tracker rate mortgage to an alternative interest rate (fixed, variable or other rate), for any reason, that their agreed tracker rate or an alternative tracker rate might not be available again in the future. As a result of this, 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. In particular, they must be notified that switching from a tracker rate may mean that they will lose the ability to avail of a tracker rate mortgage in the future, where this is the case.