Seeing through their 'clear' information

If the government had delayed its announcement about mortgage regulation in the hope of countering the downbeat assessments of its first 1,000 days in office, the plan misfired. It came later than most expected, last Wednesday, and with a bombshell: there are to be no controls on the advice given to borrowers. Information, yes, but no one will be liable if you feel you were given a wrong steer over fixed rates versus variable or capped.

The Government says the problem with mortgages is lack of clear information, not poor advice. But privately, large lenders are celebrating. They argue that the cost of training people to give advice would not be justified. There may be a grain of truth in this: it is extremely difficult to predict what sort of mortgage will work out cheapest or most suitable over several economic cycles.

But this is just where many borrowers want guidance. If they don't get it, they will stick a pin in a list, or go for the lowest rate - likely to carry the maximum strings.

The Government hopes people will steer away from unsuitable deals by absorbing the 'clear' information lenders will have to provide. But to be effective, the legislation will have to make loans with the worst penalties carry cigarette-packet-style wealth warnings.

But it's not all bad news on the mortgage front. Lenders are changing their ways, and proposals for Catmarked loans are sound, though the 2 per cent margin over base rate on variable mortgages is on the generous side. Plenty of lenders should offer these products: borrowers wanting to keep their lives simple would do well to consider them when they appear, perhaps as early as the spring.