Speeding up the process of changing mortgage providers is being discussed by the government as part of its plans to encourage account switching generally. A consultation is to take place and will consider whether it will be possible to change mortgage providers. This currently can take up to three months. The proposal is to change to as quick as seven days aligning the timescales to changing a bank account.
However, those critical of the proposals highlight the fact that switching mortgage provider is more complicated and involved than switching bank accounts. Mortgage providers not only need to take steps to satisfy themselves as to the individual’s ability to repay the mortgage by making the appropriate affordability checks but also to check the suitability of the property being offered as security for the mortgage, by ensuring that the necessary valuations and title investigations are completed.
Whilst the Council of Mortgage Lenders supports the idea of speeding up the switching process it does question whether a seven-day timescale is practical, others have said that the step could make mortgages more expensive.
The outcome of the consultation process will be awaited with interest by those involved in all aspects of the mortgage business.