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Your support makes all the difference.STEPHEN BYERS, the Secretary of State for Trade, will unveil plans to slash the cost of mortgages later this week. He is to tell the Labour Party conference that he has had enough of consumers getting a raw deal when they make the most expensive purchase of their lives.
And he will warn lenders they will no longer get away with scams that cost home owners in Britain hundreds of millions of pounds a year.
Mr Byers' pledge is to "tear up" existing mortgage forms, which bury hidden costs in the small print and lock buyers into deals without telling them about extra charges and conditions.
He wants to make the paperwork for buying a house concise, easy to understand, up-front and honest.
"You are given information about your mortgage but the information of most importance to you may be in the midst of reams of small print and only get to you when you are about to exchange contracts on the house of your dreams," he is expected to say in his speech to the conference on Wednesday afternoon.
"I propose to start with a blank sheet of paper ... to start with what's best for consumers and work from there."
The Department of Trade and Industry intends to consult consumer groups and mortgage companies about the proposals - the first phase of wider reforms and legal changes to mortgages.
Mr Byers is convinced the reforms will not only ease the stress and strain of buying a house but save people money as well. An average mortgage of pounds 65,000 currently costs around pounds 750 to set up, with charges that include administration fees, legal charges and surveys, as well as compulsory add-ons like insurance.
But a range of rip offs means that in practice costs can soar. Many lenders charge a one-off booking fee on their special mortgage offers of between pounds 150 and pounds 300. Some charge a mortgage indemnity premium of pounds 1,000 or more if you borrow more than 90 per cent of the value of the house. Often, contracts insist buyers take out home insurance with the lender - even if they could find it cheaper elsewhere. And there can be administration fees of up to pounds 80 if you need to move your mortgage or pay it off.
Furthermore, many lenders re-calculate mortgage payments on an annual basis, taking no account of capital repaid each month - a practice which costs home owners an estimated pounds 350m a year.
DTI sources said yesterday: "Basically we are trying to prevent things like this from happening and making sure people know basically what it is they are buying. It is certain to save people money."
Mr Byers has brought consumer affairs into sharp focus since taking over from Peter Mandelson at the DTI.
According to sources, his conference speech, as well as charting the progress of the department since Labour came to power, is designed to be a crucial blow in his war against "rip-off Britain".
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