Ban mortgage best buy tables, says broker

Monday, 16 February 2009 01:50

Mortgage best buy tables are irrelevant and provide a false picture of the mortgage market, it was claimed today.

Broker Email Mortgages is calling for best buy tables to be scrapped as beyond headline rates and minor details, they do not provide consumers with full details of the mortgage.

The firm claims details about levels of fees, the loan-to-value rates and if geographical exceptions are often not included in best buy tables.

Michael White, chief executive of Email Mortgages, said: "Best Buys do more harm than good in that they provide the consumer with unrealistic expectations of the mortgage they will be able to secure.

"It happens quite a lot that people come in demanding mortgages in best buy tables. But in the vast majority of cases people are not eligible or suitable for the deals."

He added the trouble with best buy tables was that they put interest rates out of context - with fees, people's lifestyles are often more important to the choice of the best mortgage for their needs.

"Best Buy tables in today's market are obsolete and we would urge all consumers to take them with a large pinch of salt," Mr White said.

Darren Cook from Moneyfacts.co.uk, which provides best buy tables for local and national papers, explained best buy tables should be used as the "first port of call" for those looking for a mortgage - and admitted their complexities meant tables should not be a be all or end all.

"Best buy tables should be seen as a barometer and an assessment of the market as a whole."

He explained users should look at the tables to see the direction the market, for example when comparing fixed rates and trackers.

Mr White questioned how many best buy mortgages ended up being sold.

"What we would like to know is, who's buying the Best Buy mortgage?" he said.

"We can guarantee that, for the vast majority of consumers, the products detailed in the Best Buys are wholly irrelevant and they will have little chance of securing these headline grabbing rates because of the products' criteria."

Mr Cook admitted there were difficulties in creating comparisons, but said: "We try to compare oranges and oranges."

He added the Moneyfacts tables were not just rate driven but did look at fees - however this can be difficult with percentage fees as it is hard to assume the size of a mortgage - and so the size of the fee.

"Individuals have different requirements. And mortgages are far from spontaneous decisions; they are the biggest financial decisions in people's lives."

Mr Cook added people could use tables when speaking to a mortgage broker to highlight certain deals and the broker would be able to explain why some were more suitable.

He also defended the inclusion of mortgage deals with geographical limits - often used by local smaller building societies - saying these are only put local newspapers and not nationals.

"Best buy tables must be in the interest of the consumer and not driven by suppliers," Mr Cook said. "Integrity is important and once questioned it is a danger."

Mr White said: "Best Buy tables are merely a marketing tool for those who produce them and they do not help the consumer in their search for mortgage finance."

He added in the current fast paced markets - as deals appear as disappear quickly - many published best buy tables can be out of date.

He also called on so-called consumer champions to highlight the problem of best buy tables.

"People have got in the habit of accepting best buy tables - but it is a bit like the emperor's new clothes," Mr White said.

"If people pick a newspaper and see the headline, they know it is not the whole story. The same does not exist with best buy tables.

"People see tables and assume they can have that that deals as it is not obvious to all people how the tables work."

He concluded: "They are a tool, not the be all and end all - but people do treat them like that. They need to learn there is a difference between what they read in table and what they can qualify for."

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