On 26 March 2019, the UK Financial Conduct Authority published a consultation paper, CP 19/14, called ‘Mortgage customers: proposed changes to responsible lending rules and guidance’ (the CP).
The CP proposes to revise the creditworthiness and affordability rules for certain customers who want to switch products, or re-mortgage with another lender, where:
– they are up to date with their payments under an existing regulated mortgage contract (and have been for at least 12 months) but are unable to do so because they do not meet the FCA’s detailed rules (which were introduced in April 2014 following the Mortgage Market Review); and
– they don’t want to borrow more (excluding any product or arrangement fee for the transfer or re-mortgage).
The CP contains the FCA’s proposed changes to the Mortgages and Home Finance: Conduct of Business sourcebook to (amongst other things) (a) relax those rules in certain circumstances and (b) contact customers who may be eligible.
The consultation period ends on 26 June 2019.