Andrew Montlake (pictured, centre), managing director of Coreco Mortgages, has warned about the risk that the ease of product transfers (PTs) could mean borrowers are “sleepwalking into getting the wrong deal.”
Montlake spoke as part of a panel discussion to mark the launch of the Pepper Money 2024 Specialist Lending Study.
The panel featured Montlake, alongside economist Trevor Williams (pictured, left)n and Liz Syms (pictured, right) from Connect Mortgages, where they addressed misconceptions prevalent among mortgage customers concerning the specialist lending market.
During the discussion, Montlake pointed out that “it’s easy to press a button or it’s easy to speak to someone on the phone” when discussing the convenience of product transfers, noting that this has led to some homeowners agreeing to deals without fully understanding the implications.
Montlake raised concerns about how some borrowers may not be aware of better options available to them, particularly if they opt not to engage with an adviser.
Part of the solution suggested by the panel was to ensure greater understanding among consumers of the benefits of working with a broker – something that Montlake highlighted in a recent discussion with pundit Martin Lewis.
However, Montlake also highlighted the potential dangers of lenders aggressively promoting product transfers without providing – or signposting to – adequate advice.
He said: “I think lenders who are aggressively targeting PTs could potentially get themselves in a lot of trouble going forward because there is no advice.”
He added: “As a broker, if I’ve advised someone five years ago on a 25-year mortgage and then they suddenly go directly to a lender and they change that advice, I think there’s a risk there.”
