"New regulations will put greater emphasis on lenders demonstrating products have been developed with fair value in mind to meet particular customer requirements"
Five lenders are piloting Mortgage Broker Tools' new predictive mortgage modelling software, MBT Sandbox.
The tool aims to help lenders make smarter product, pricing, criteria and affordability decisions using advanced analytics utilising real-time data.
Within the Sandbox, lenders can edit over 60 criteria elements including LTV and maximum loan by mortgage type (e.g first-time buyer, interest-only or new build) repayment type, term, age, and maximum income, etc.
Lenders can also edit initial and reversion rates, as well as stress rates, to see how pricing impacts elasticity once criteria and affordability are taken into consideration.
Sandbox uses live information from MBT’s data resources and provides lenders with real-time insights to make data-driven decisions based on market demand.
Tanya Toumadj, CEO at Mortgage Broker Tools, said: “Consumer Duty is just around the corner. The new regulations will put greater emphasis on lenders demonstrating products have been developed with fair value in mind to meet particular customer requirements – and this will require data to show rationale.
“MBT Sandbox provides lenders with a ground-breaking data-driven approach to product development, enabling them to create and refine products with specific customer segments in mind. By more accurately targeting customer types, lenders will be able to more easily demonstrate the approach they have taken and their reasoning why they believe the product will result in a positive customer outcome.
“At MBT, we are now working with five lenders to help ensure they are able meet both their regulatory obligations and commercial objectives, by taking a smarter, more data-driven approach to product development.”
