Customers are to be better protected when taking out a home loan under new regulations to be issued soon.

Parliamentary secretary for Consumers and Competition Chris Said announced that the draft regulations, out for public consultation in the coming weeks, would protect customers taking the long-term commitment of a home loan. He said the regulations were shaped on a directive being discussed by the EU commission and that the government was aiming to implement them before the directive came into force.

The new EU rules aim to bring union-wide regulation to a market which, so far, has been very fragmented. One of its proposals makes it possible for EU consumers to shop around – even internationally – for their home loan.

The parliamentary secretary said the local regulations would be addressing unclear or difficult information related to the home loan and the exercise which banks undertook to see whether a client could handle a particular loan or not.

He said this would eventually lead to greater consumer trust and diminish the likelihood of people choosing packages that were not appropriate for them.