Lenders must help remortgagers

The mortgage industry must be more active in supporting borrowers facing remortgage challenges if a new advice service is to work effectively.

That is verdict of supporters of the newly-launched 'stay in control of your finances' checklist, an online guide which aims to provide advice to people struggling with mortgage repayments.

The Financial Services Authority (FSA) announced it was creating the information source for remortgagers as 1.4 million discounted and fixed-rate deals come to an end in 2008 in a bid to prevent repossessions and financial heartache.

The checklist, published on the FSA's website, is part of a huge advertising campaign being run by the financial watchdog which comes as remortgagers face indecision over the best deals on the market as the credit crunch makes lenders more reluctant to provide loans.

Louise Cuming, head of mortgages at moneysupermarket.com, said the FSA should be applauded for trying actively to help people make mortgage decisions.

"The advice boils down to common sense every borrower should be aware of and act on," she said.

"In essence they should only take debt they can afford in the first place, research their options thoroughly, and seek help if they start to struggle with repayments."

But Ms Cuming called on the mortgage industry to encourage borrowers to take these crucial steps when arranging and maintaining their mortgage.

She said: "It's vital the industry supports them. It's the responsibility of lenders and advisers alike to reinforce these messages and ensure they continue to watch out for borrowers in what will undoubtedly be a painful year."

The FSA said there were 1.4 million discounted or fixed-rate mortgages coming to an end this year which consumers might find difficult to replace amid higher interest rates and tighter lending criteria.