Budget: Mortgage and Credit

MORTGAGE AND credit lenders will be forced to provide clear comparable information on the products they offer. The proposals include measures to specify the way in which Annual Percentage Rates (APRs) for low-start and discount mortgages are calculated.

A single formula for calculating APRs across the European Union will have to be implemented, allowing borrowers to work out how much their mortgages will cost relative to those in any other European country.

The Financial Services Authority will be given powers to take action against lenders under the Unfair Terms in Consumer Contracts Regulations. It will not be possible for such regulations to be introduced retrospectively. The DTI is, however, preparing to publish proposals on allowing the courts to re-open "extortionate credit bargains".

Nic Cicutti