Criteria for personal mortgages
PANA criteria for mortgages to display the FairLife Mark
PANA stands for Peer Agreed and Nationally Approved meaning that the criteria have been agreed by a peer group of providers and approved by the FairLife Charity. The resulting standards combine fairness to the public with business practicality. PANA criteria evidence that FairLife-marked products and services meet the FairLife Pledge.
- Communications and charging structures must be clear, fair and not misleading. In particular the provider must [use reasonable endeavours to] adopt the Which? / CML standard nomenclature for fees and charges available at: https://www.cml.org.uk/policy/policy-updates/all/transparency-of-mortgage-fees-and-charges/ and https://www.cml.org.uk/documents/tariff-of-mortgage-charges/tariff-of-mortgage-charges.pdf.
- The product must not discriminate in a negative way against existing customers. If a separate bonus is to be offered to new customers, this must be in addition to the product.
- The mortgage must have a maximum loan to value (LTV) of 100% or less .
- Fees and charges, other than the interest rate and any upfront admin fee, must be designed only to cover additional costs and not to generate additional profits.
- Firms must have in place, and operate, a policy for offering their existing customers the ability to switch to a more affordable mortgage product. In particular where an existing customer has suffered price depreciation, but no other covenants have been breached, the customer must not be excluded from the provider’s highest LTV FairLife mortgage product based solely on the effect of the price depreciation.
- Customers must be able to overpay their mortgages without charge by 10% per year and be able to repay their mortgages completely without charges in excess of reasonable costs.
- The provider must be fair to holders of mortgages in arrears:
- The provider must inform customers that they can get free debt advice.
- The provider must have a policy for the fees and charges applied to customers in arrears, which must aim to minimise these fees and charges.
- The provider must have a policy for how they deal with particularly vulnerable customers in arrears.
- No business area that supports customers in arrears must be a profit centre.
- The provider must be fair to customers facing repossession and must not repossess a property unless all other reasonable attempts to resolve the position have failed. In particular:
- The provider must have given a grace period of at least 3 months.
- If the provider has mortgage shortfall insurance, the insurer must not be able to pursue the borrower after a claim.
- The provider must follow FairLife’s criteria for debt recovery in relation to any mortgage shortfall:
- Inform the customer that they can get free debt advice.
- Add nothing by way of interest, fees or costs to customers’ in debt recovery (with the exception of court fees and costs).
- Include these instructions as part of the transaction if the debt is sold or passed on (unless passed to a FairLife debt recovery firm).
To download a summary of the mark click here
The FairLife Mark is a mark of integrity that can, at the charity's discretion, be awarded based on the provider’s own declarations. The licensee may use the mark on any qualifying products and cancel at any time.
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