Now EU meddlers want to slap THOUSANDS on cost of mortgages for British homeowners
BRITISH homeowners could be left paying thousands of pounds more on their mortgage every year, thanks to new regulations being mapped out by "incompetent" European Union officials.
The new Brussels ruling – known as the Mortgage Credit Directive and due to come into effect in March next year – could push up the price of borrowing for UK families.
New borrowers are now under obligation to take stricter affordability tests under the UK's Mortgage Market Review last year.
Existing homeowners seeking to remortgage were exempt from these assessments.
However, under the EU's new rules, borrowers will ONLY avoid stricter tests if they stay with the SAME lender – which could bar them from making the most of historically low mortgage rates currently on offer.
Some UK lenders do not offer new rates to existing borrowers, which will force those having to stay with the same lender onto more expensive rates if they wish to remortgage.
Ray Boulger, of brokers John Charcol, warned the new EU ruling could affect hundreds of thousands of Britons.
I don’t know whether the EU has just been incompetent in drafting these rules or actually wants consumers to have worse outcomes, but it has to be one of these
“I don’t know whether the EU has just been incompetent in drafting these rules or actually wants consumers to have worse outcomes, but it has to be one of these," he told The Times.
Mr Boulger gave the example of a borrower who stayed with Yorkshire Building Society instead of going elsewhere.
They would be be unable to access the lender’s top 1.18 per cent two-year fixed rate and instead have to take its 2.04 per cent transfer fee rate instead.
If they had a £250,000 mortgage at a loan-to-value level of 65 per cent, this would mean they paid an extra £2,625 over two years.
He added: "It makes no sense to force responsible homeowners to pay more than they did before in an environment where we are trying to reduce risky borrowing."
The much stricter regulations are to be implemented across the EU by March 21, 2016.
