Category: Mortgages

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FCA publishes mortgage rule review webpage

Earlier today, on 2 October 2025, the UK Financial Conduct Authority (the FCA) published a mortgage rule review webpage bringing together a summary of the FCA’s work on its mortgage rule review.

The webpage’s aim is to set out the FCA’s changes and communications and what they mean for firms.

So far, the FCA lists five important developments. These are:

– the flexibility in the FCA’s existing stress test rule in MCOB 11.6.18R (and more can be found by visiting another webpage published by the FCA);

– the FCA’s Discussion Paper on the future of the UK mortgage market (the FCA has published a webpage and the Discussion Paper; the consultation period ended on 19 September 2025);

– the changes made to MCOB to support greater choice in the mortgage market (for more, see our summary of the changes);

– the developments to the loan-to-income flow limits; and

– the FCA’s speech on mortgage reform to the Building Societies Association from May 2025.

It’s expected that this will continue to be updated in the coming weeks, months and years.

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FCA publishes policy statement setting out changes making it easier for borrowers to re-mortgage

Earlier today, on 22 July 2025, the UK Financial Conduct Authority published a news article, a press release and a policy statement setting out its changes to the the FCA Handbook, including to the Mortgages and Home Finance: Conduct of Business Sourcebook (or MCOB), aiming to make it easier for borrowers to re-mortgage.

What’s changed?

The FCA has made the following changes:

– mortgage advice and interactive dialogue: the FCA has removed the interaction trigger at MCOB 4.8A.7R(3) and associated rules and guidance in MCOB 4 and MCOB 8. This means interactions between firms and their customers should not automatically trigger advice.

– affordability assessments when reducing the mortgage term: the FCA has removed the requirement for a full affordability assessment when reducing a mortgage term by introducing MCOB 11.6.3R(6). But firms must still consider affordability under their responsible lending policy and the consumer duty and PRIN 2A.

– amending affordability assessments when re-mortgaging: the FCA has amended the modified affordability assessment in MCOB 11.9 to include new mortgage contracts with new lenders where it is more affordable than either (a) the borrower’s current mortgage or (b) a new mortgage product that is available to that customer from their current lender.

– retiring guidance: the FCA has retired guidance in FG13/7 (dealing fairly with interest-only mortgage customers who risk being unable to repay their loan) FG24/2 (guidance for firms supporting their existing mortgage borrowers impacted by the rising cost of living) (and there are some new provisions in MCOB 13.2.1AG, MCOB 13.3.8AR and MCOB 13.3.8BG).

– Gibraltar: the FCA has added MCOB 4.1.2ER to make it clear that these changes apply to any Gibraltar-based mortgage lenders who may want to lend within the UK in the future.

When do these changes come into force?

These changes come into effect straight-away.

Why has the FCA made these changes?

The changes made by the FCA aim to allow borrowers to:

– find it easier to reduce their mortgage term, helping to lower the total cost of borrowing and reduce the risk of their repayments extending into retirement;

– more easily re-mortgage with a new lender (which should help them access cheaper products); and

– be able to discuss options with their mortgage provider and get advice when they need it.

The FCA has removed guidance which has “served its purpose” to reduce the regulatory burden.

These changes are part of the FCA’s first steps to simplify its rules and increase flexibility. The FCA says the “Consumer Duty sets clearer, up-to-date standards in financial services“. The changes to the FCA’s rules, including MCOB, aim to provide “greater opportunity for innovation“.

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FCA publishes policy statement and finalised guidance on ways consumer credit and mortgage firms should support customers in financial difficulty

Earlier today, on 10 April 2024, the UK Financial Conduct Authority published a press release and Policy Statement, PS24/2, setting out the new rules and guidance which will apply to consumer credit and mortgage firms to support customers in financial difficulity.

The FCA has also published updated finalised guidance, FG24/2, and a press release.

The changes made to both CONC and MCOB by PS24/2, and FG24/2, will come into force on 4 November 2024.

We’ve set out a summary in a one page infographic (if you click the infographic it should be larger):

If you want a PDF copy, please contact your usual contact at Walker Morris LLP.

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FCA publishes data on Mortgage Charter uptake

On 22 March 2024, the UK Financial Conduct Authority published data on firms who have signed up to the Government’s Mortgage Charter.

The key points are:

– There are 48 signatories to the mortgage charter (making up around 90% of the mortgage market).

– The data suggests at least 760,000 accounts benefitted from one or more of the options set out in the Charter.

– Around 90,543 mortgage accounts have temporarily reduced their monthly payments under the FCA new rules.

– Between July 2023 and January 2024, the monthly payments on around 123,000 accounts were reduced as people switched to temporarily paying interest-only or extended their mortgage term (making up around 1.4% of the regulated mortgage contracts). Only 103 term extensions were reversed.

– The data says 67 properties were repossessed within 12 months of missing the first payment. Firms say these were for customer-driven reasons.

– It is difficult to estimate the total number of borrowers who have taken up one or more of the options set out in the Charter.

– The FCA reminds firms that the options under the Charter form only part of the support. All borrowers can contact their lender and discussion their options (see, for example, the industry’s ‘Reach Out’ campaign. This support could include contract variations or appropriate forbearance measures.

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Land Registry updates Practice Guide on discharges of charges

On 18 September 2023, the Land Registry published an updated Practice Guide 31 on the discharge of charges.

There are two main changes:

– Section 6.7 (headed ‘What Land Registry issue on completion of an electronic discharge’) and Section 7.8 (headed ‘What Land Registry will issue on completion of registration of an e-DS1’) are deleted; and

– Section 7.5 (headed ‘What you should do if you act for a borrower’) has been changed.

These changes have been made because the Land Registry no longer sends redemption letters to borrowers.

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The Mortgage Charter and changes to MCOB to help borrowers

Mortgage lenders have had a busy time recently. The Government has published the Mortgage Charter (which is a voluntary charter that first charge lenders can sign up to) and the FCA has published Policy Statement 23/8 to enable firms to do what the charter requires. For more on the changes to MCOB, please see my earlier post.

We’ve put our heads together at Walker Morris towers to produce a one page summary of what the changes are and what firms need to do. If you click on it, you’ll get a bigger version of it.

If anyone needs a PDF copy with the embedded links (shown in the image as underlining), please contact me, Jeanette Burgess or Hasan Siddique.

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FCA publishes Handbook Notice 110 setting out changes to CONC and MCOB

At the end of June 2023, the UK Financial Conduct Authority (the FCA) published Handbook Notice 110. This set out changes made to the FCA Handbook 2 June 2023 and 30 June 2023. These include:

– changes to CONC 8.3 and TP8 (and changes to PERG 2.9 and PERG 17.7) resulting from the Consumer Credit (Debt Packager Remuneration from Debt Solution Providers) Instrument 2023. This introduces rules and guidance banning debt packers from receiving remuneration from debt solution providers and came into force on 2 June 2023.

– changes to MCOB 11.6 resulting from the Mortgage Affordability Rules (Amendment) Instrument 2023. This implements the Mortgage Charter and allows lenders to offer borrowers a switch to interest-only repayments for six months and a term extension to reduce their monthly repayments and switch back within six months (for more, please see Policy Statement 23/8: Mortgage Charter: enabling provisions and the FCA’s press release). These changes came into force on 30 June 2023.

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FCA publishes final report on strategic review of retail banking business models 

On 20 January 2022, the UK Financial Conduct Authority published its final report following its strategic review of retail banking business models, together with a webpage and press release.

This report follows the FCA’s progress report from June 2018.

The key points from the final report are:

– large banks have a strong position but are facing challenge from others;

– low levels of consumer engagement have historically contributed to high barriers to entry and expansion;

– digital challenges have rapidly gained a share of the personal current account and business current account markets

– competition in the mortgage market has increased (causing yields to come down)

– yields for consumer credit firms have fallen too (particularly on unarranged overdrafts);

– large banks did proportionately more micro-business lending under the government schemes than most other banks; and

– increased competition and innovation have improved outcomes for many consumers and some small businesses.

The FCA says it will be “discussing the points raised in our 2022 Final Report with firms and consumer organisations but are keen to hear from other stakeholders”. The FCA has invited written submissions by 31 March 2022.

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FCA updates its webpage following meeting of implementation group on switching options for mortgage prisoners

On 27 January 2022, the UK Financial Conduct Authority updated its webpage following a meeting of the implementation group on changes to deliver switching options for mortgage prisoners.

The FCA’s website says the group met on 7 December 2021 for its final meeting.

– The group discussed the analysis undertaken for the Mortgage Prisoner Review Report which the Government laid before Parliament on 29 November 2021.

– The group noted that “regulatory data had been used to give a factual assessment of the reported characteristics of the wider population of borrowers and mortgages in closed books with inactive firms compared to reported characteristics of borrowers and mortgages with active lenders“.

– The FCA talked through its analytical approach to give an up-to-date estimate of the number of mortgage prisoners in closed books with inactive firms and their loan and borrower characteristics.

– The group agreed that the regulatory barriers had “been removed“.

– It was agreed that the group had completed its intended work and could be dis-banded.

The next step is for the Government to consider the review and decide if any further steps are needed.

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FCA sends portfolio letter to mortgage third party administrators

On 10 August 2021, the UK Financial Conduct Authority published a portfolio letter it had sent to mortgage third party administrators.

This letter sets out that the FCA considers there are three areas of potential harm:

– customer treatment: firms need to particularly focus on vulnerable customers, ensuring appropriate forbearance and giving customers clear information on their complaints and why they are being pursued for debt.

– operational resilience: firms need to have adequate systems and controls, processes and policies in place, and the appropriate governance and oversight, to mitigate the risk of operational events.

– prudential resources: liquid resources are critical for a firm’s survival.

The FCA’s areas of focus for supervision will therefore be on:

– fair treatment of customers;

– vulnerable customers;

– operational resilience;

– financial resilience;

– forbearance and due consideration;

– senior managers and certificate regime;

– the FCA’s supervisory strategy; and

– regulatory reporting.

Whilst the focus of this letter is on mortgage third party administrators, other third party administrators (particularly those involved in consumer credit) read this portfolio letter and consider whether any further steps should be taken.

The FCA also wrote to firms outsourcing their mortgage activities reminding them of their obligations.