The UK Financial Conduct Authority (FCA) has published a consultation paper (CP25/11) on simplifying its rules on mortgage lending and increasing flexibility, with an updated webpage and press release. This is the first set of proposals made through the Mortgage Rule Review (MRR), and forms part of the FCA's 5-year strategy. The FCA is proposing to amend its mortgage advice and selling standards, and its affordability rules for mortgage term reductions and remortgaging. The FCA also proposes to retire two pieces of non-handbook guidance (FG13/7 and FG24/2). Broadly, the proposals seek to make mortgage regulation simpler; reducing the different sources firms have to check to understand the regulatory expectations; and will streamline processes, reduce costs and promote competition. For consumers, it is hoped that the changes will make it easier to: (i) engage with mortgage providers; (ii) reduce mortgage terms, lowering the total cost of borrowing and reducing the balance of mortgage debt taken into later life; and (iii) access the cheapest products available when remortgaging. The deadline for comments is 4 June and the FCA aims to publish its policy statement in Q3 2025. In addition, the FCA plans to launch a public discussion on the future of the mortgage market in June, covering: (i) risk appetite and responsible risk taking; (ii) alternative affordability testing and product innovation; (iii) lending into later life; and (iv) consumer information needs.
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