People find it very difficult to compare mortgage deals which is probably the biggest disincentive to switch Evaluating what is effectively a 20 year deal is inherently difficult A lender might be good value today, but they might not pass on rate cuts A lender has high rates, but gives 3% cash back. Would the following work? 1) Lenders must quote an SVR for a standard product e.g. <90% LTV, <3.5 times LTI, clear ICB record. 2) They can set a discount (or premium) on this when the mortgage is taken out 3) They would be free to raise or reduce the SVR at any time, but must do so for all customers 4) They could not reduce the discount for existing customers. 5) They could change the discount for new customers 6) No cash backs allowed other than the cost of switching - limited to €1,500 Advantages Would avoid the need to control mortgage rates. Would greatly reduce discrimination against existing customers Would make the market much more transparent Would eliminate gimmicks and tricks Would probably reduce the wasteful process of shopping around It wouldn't solve the following problems Lenders who are closed to new business - their rates would still need to be controlled - probably based on the average SVR which would now be easily determined Lenders could still charge what they want to people in Negative Equity. How it would work in practice for borrowers Johnny wants a 90% LTV mortgage. Comparing products would be a lot easier. Mary has a 50% LTV mortgage and finds that AIB is offering a 1% discount on their SVR of 4%. It's a little bit more complicated because KBC may offer a 0.5% discount on an SVR of 3.5%. But she knows that whichever one she goes with, they will have to reduce the rate for her if they reduce it for other customers. Paddy has been approved for an exception to the Central Bank rules - 95% LTV and 4 times LTI. He can be quoted a rate of SVR +0.5%. How it would work for lenders AIB wants to increase their market share. They have two options. They can reduce the SVR, but they reduce it for all customers. They want to target 50% LTV business, so they increase their discount.