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Compare The Market interest-only mortgage content flagged as incorrect by brokers

ended 11. October 2023

Brokers have highlighted incorrect content around interest-only mortgages on comparison website, Compare The Market.

In response to the headline: “Should I overpay if I have an interest-only mortgage?”, the website responded with the following (see screengrab below): “You'll have to weigh up overpaying an interest only mortgage very carefully as it has few advantages. With an interest-only mortgage any overpayments won't be paying off the capital like it would with a repayment mortgage - this has to be paid in one go at the end of the term, So you won't be reducing the amount owed, which means your overpayments will have little effect. Instead you might want to consider boosting whatever savings or investments you've chosen to meet your capital payment at the end."

The content was identified by Steven Morris, director at Bristol-based independent mortgage broker, Advantage Financial Solutions, who shared his thoughts on LinkedIn and explained why the copy is incorrect to Newspage:

“This is just factually incorrect. Interest-only mortgages are as they sound, where only the interest for borrowing the money is charged. This interest is paid using the monthly direct debit. Therefore any additional payments can only come off of the mortgage balance owing. Where else could the money possibly go? If you overpay and, say, halve your mortgage balance, you are then being charged interest on a balance half the size, resulting in half the payment. In the words of a certain famous meerkat, simples.”

Hannah Bashford, director at Model Financial Solutions, was nonplussed: "I’ve had to re-read this several times to see if I can make any sense of it, but it would appear whoever wrote this has no idea how overpayments work. This is factually incorrect and should be revised immediately and replaced with a description of interest-only mortgages by someone who knows what they’re talking about."

Luke Thompson, director at PAB Wealth Management, said the content could prove extremely costly to consumers: “This is why you need a mortgage adviser and shouldn't try to do everything yourself by using these websites. Put bluntly, it's wrong but a layman on the street will potentially take this as gospel as it is posted on a big website that should have quality control measures in place. If someone with an interest-only mortgage took this 'advice' at face value, it could end up costing them thousands of pounds.”

Craig Fish, director at London-based broker, Lodestone Mortgages & Protection, was staggered: “How is it even possible that such vastly incorrect information can be shared on one of the UK's largest consumer reference sites? The 'expert' responsible for those comments should have their adviser license removed, that is if they even have one. The FCA needs to clamp down on this quickly because many thousands of UK consumers, unfortunately, look to these places for information and advice, and to be fed such false information is a punishable offence.”

Stephen Perkins, managing director at Yellow Brick Mortgages, said: "I am not surprised by this, given such websites are using experts who are largely unqualified to give advice and therefore giving incorrect information. How these large companies sign off such financial promotion and content given the approval processes brokers have to go through is baffling. The FCA needs to ensure that advice given on large platforms such as these is compliant and accurate, especially given the influence they have. The lesson here is to get real qualified experts to write your content."

Michelle Lawson, director at broker, Lawson Financial, described it as “disgraceful at best”. She continued: "For a huge and 'trusted' consumer platform such as this to have such inaccurate information is frightening and highlights further the need for advice rather than information. Various industry commentators champion these sites, but are they checking who they champion? Hopefully action will be taken to ensure this is corrected and communicated, however it is impossible to tell how many people will have taken onboard this error."

Meanwhile, Bob Singh, founder at Chess Mortgages, said someone in compliance must have been asleep at the wheel: "This is quite frankly laughable. The public read and believe these websites and this one takes the biscuit. Clearly someone in compliance and financial promotions has been sleeping at the wheel. I’m sure it will be corrected the moment it’s brought to their attention."

Rohit Kohli, operations director at The Mortgage Stop, was also flabbergasted that this got through compliance: “How did this get through any sort of due diligence or compliance checks? It smacks of someone using some sort of AI to create some content and then just throwing it out there. If this had been from a smaller firm I can almost guarantee there would be consequences. As it's one of the big players, we know nothing will happen.”

Ross McMillan, owner at Glasgow-based broker, Blue Fish Mortgage Solutions, was worried about the impact on consumers: "What makes this misinformation so startling and scary, is that sites such as these are considered a reliable source for a huge swathe of the general public. Even though they are largely simply affiliate-based corporate machines, the status of sites such as these with the general public means it's frankly a disgrace that they haven't had the responsibility to do a basic sense check of their content. Perhaps it's time for them now to consider featuring a ‘What our guy down the pub says’ article instead, as based on the evidence of this article, they may actually get more sense."

Justin Moy, managing director at Chelsmford-based EHF Mortgages, said this highlights why articles about regulated products should only be written by qualified industry experts: “It's disappointing that this level of misinformation is promoted on some of the most influential websites with a huge audience. Almost every mortgage lender allows for overpayments, and they will either take effect immediately or within the month, thus reducing the mortgage interest payments. Who has read that article and made a financial decision that is wrong? Articles about regulated products and services, such as mortgages, insurance and investments, must be thoroughly checked and, perhaps more importantly, written by qualified industry experts who understand their subject rather than relying upon AI, or unqualified journalists, to make statements that are certainly giving some level of advice to people.”

Updated 12/10/23: Statement from Compare The Market:

“We are committed to providing clear and helpful information to households. The content has been removed from our website and we are thoroughly reviewing all associated content. Price comparison websites give people a range of options to consider when they are making financial decisions. We recognise that mortgages are complex financial products, and it’s important for people to take time to consider the choices available to them.

 “Consequently, we always offer customers the option to take advice that is tailored to their individual circumstances, partnering with the UK’s largest fee-free mortgage adviser London & Country Mortgages Ltd (L&C), to provide our customers with advice from across the market.”

Publishers: Additional comments below. If you use any, or all, of this content for publication, please credit Newspage. For ease, all, or individual quotes, can be copied.

15 responses from the Newspage community

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Steven Morris
Advising Director at Advantage Financial Solutions
This is just factually incorrect. Interest-only mortgages are as they sound, where only the interest for borrowing the money is charged. This interest is paid using the monthly direct debit. Therefore any additional payments can only come off of the mortgage balance owing. Where else could the money possibly go? If you overpay and, say, halve your mortgage balance, you are then being charged interest on a balance half the size, resulting in half the payment. In the words of a certain famous meerkat, simples.
Copy

Editor
Bob Singh
Founder at Chess Mortgages
This is quite frankly laughable. The public read and believe these websites and this one takes the biscuit. Clearly someone in compliance and financial promotions has been sleeping at the wheel. I’m sure it will be corrected the moment it’s brought to their attention.
Copy

Editor
Justin Moy
Managing Director at EHF Mortgages
It's disappointing that this level of misinformation is promoted on some of the most influential websites with a huge audience. Almost every mortgage lender allows for overpayments, and they will either take effect immediately or within the month, thus reducing the mortgage interest payments. Who has read that article and made a financial decision that is wrong? Articles about regulated products and services, such as mortgages, insurance and investments, must be thoroughly checked and, perhaps more importantly, written by qualified industry experts who understand their subject rather than relying upon AI, or unqualified journalists, to make statements that are certainly giving some level of advice to people.
Copy

Editor
Darryl Dhoffer
Founder at The Mortgage Geezer
How this has fallen under the FCA's radar is anyone's guess. This comparison website company has millions of customers, who rely on the information being correct from this company, and this is a clear breach of information. How many clients over the years have read this information and decided not to make overpayments (when they can and reduce the capital) because they felt a "trusted" website was giving them the correct information, which is wrong. I can see a few complaints coming their way, and hopefully a fine from the FCA. The emphasis on independent specialist mortgage advice is paramount in today's market, with a real person and company dedicated, and leave comparison websites to work on your mobile phone, utilities, internet and car insurance. Mortgages are clearly too big an area for them to give correct, compliant advice.
Copy

Editor
Craig Fish
Director at Lodestone Mortgages
How is it even possible that such vastly incorrect information can be shared on one of the UK's largest consumer reference sites? The 'expert' responsible for those comments should have their adviser license removed, that is if they even have one. The FCA needs to clamp down on this quickly because many thousands of UK consumers, unfortunately, look to these places for information and advice, and to be fed such false information is a punishable offence.
Copy

Editor
Rohit Kohli
Director at The Mortgage Stop
How did this get through any sort of due diligence or compliance checks? It smacks of someone using some sort of AI to create some content and then just throwing it out there. If this had been from a smaller firm I can almost guarantee there would be consequences. As it's one of the big players, we know nothing will happen.
Copy

Editor
Michelle Lawson
Director at Lawson Financial
This is disgraceful at best. For a huge and 'trusted' consumer platform such as this to have such inaccurate information is frightening and highlights further the need for advice rather than information. Various industry commentators champion these sites, but are they checking who they champion? Hopefully action will be taken to ensure this is corrected and communicated, however it is impossible to tell how many people will have taken onboard this error.
Copy

Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
I am not surprised by this, given such websites are using experts who are largely unqualified to give advice and therefore giving incorrect information. How these large companies sign off such financial promotion and content given the approval processes brokers have to go through is baffling. The FCA needs to ensure that advice given on large platforms such as these is compliant and accurate, especially given the influence they have. This also highlights the dangers of AI in generating regulated financial content, as all generative AI only minces and reconstitutes existing content like poor quality chicken nuggets. It is very much a Garbage in, Garbage out system which has led to this misinformation being served up by AI on multiple platforms. The lesson here is to get real qualified experts to write your content.
Copy

Platinum
Elliott Culley
Director at Switch Mortgage Finance
When you think how many people probably read this misinformation, it makes you worry how many members of the public have believed this in a time when they may have been looking for advice in the current financial climate. These companies will have to rethink their strategies on writing content as it's clear they have all used the same process here. I tested AI content writing in the past, but noticed there were areas mistakes were made. You need to ensure a mortgage expert is checking and signing off any content for a mortgage advice webpage.
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Charles Breen
Founder at C B
This is why you need to use a broker. They are not qualified to give advice and spread lies like this to people. All CompareTheMarket cares about is mining people for their data. I hope the FCA takes strong action against them like they would a smaller independent broker if we spread such blatant mistruths. The ball is firmly in the FCA's court to see if there is parity between big firms and small firms and the actions they take against bad actors in the sector, which Compare The Market are showing they blatantly are.
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Graham Cox
Director at Bridging Hub
It's mindblowing to think so-called 'reputable' brands are putting out such misinformation. The FCA should be clamping down on this, as it could result in borrowers making completely the wrong mortgage decision for their circumstances.
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Ross McMillan
Owner/Mortgage Advisor at Blue Fish Mortgage Solutions
What makes this misinformation so startling and scary, is that sites such as these are considered a reliable source for a huge swathe of the general public. Even though they are largely simply affiliate-based corporate machines, the status of sites such as these with the general public means it's frankly a disgrace that they haven't had the responsibility to do a basic sense check of their content. Perhaps it's time for them now to consider featuring a ‘What our guy down the pub says’ article instead, as based on the evidence of this article, they may actually get more sense.
Copy

Luke Thompson
Director at PAB Wealth Management
This is why you need a mortgage adviser and shouldn't just try to do everything yourself by using these websites. You wouldn't take your car to be fixed by a plumber. Conversely using a website that is offering generic advice that doesn't necessarily fit your needs could end up costing you money. But, let's deal with the information contained in this post. Put bluntly, it's wrong but a layman on the street will potentially take this as gospel as it is posted on a big website that should have quality control measures in place. If someone with an interest-only mortgage took this 'advice' at face value, it could end up costing them thousands of pounds.
Copy

Gary Bush
Financial Adviser at MortgageShop.com
The message is clear: when dealing with your financial affairs only use a full advice service provided by suitably qualified and experienced financial advisers.
Copy

Hannah Bashford
Director at Model Financial Solutions
I’ve had to re-read this several times to see if I can make any sense of it, but it would appear whoever wrote this has no idea how overpayments work. This is factually incorrect and should be revised immediately and replaced with a description of interest-only mortgages by someone who knows what they’re talking about.