The Financial Conduct Authority has launched a consultation to make it “easier, faster and cheaper for borrowers to make changes to their mortgage”.
The watchdog says with the introduction of its wide-ranging 2023 Consumer Duty rules “which sets clearer, up-to-date standards in financial services, we want to remove guidance that’s no longer required and provide greater opportunity for innovation”.
The consultation proposes ways to make it easier to:
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remortgage with a new lender
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reduce the overall cost of borrowing through term reductions
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discuss options with a firm, whilst still having the option to seek advice if needed
The FCA will accept comments until 4 June, and then plans to publish a policy statement in the third quarter of this year,
The body adds that, in June, “we will follow this work with a further public discussion on the future of the mortgage market”.
It says this will include “consideration of risk appetite and responsible risk-taking, alternative affordability testing and product innovation, lending into later life and consumer information needs”.
FCA director of retail banking Emad Aladhal adds: “Our strategy aims to deepen trust and rebalance risk to support growth and improve lives.
“That’s why, with the Consumer Duty now in place to maintain high standards, we want to make it easier, faster and cheaper for borrowers to access and make changes to their mortgage.”
In March, FCA chief executive Nikhil Rathi (pictured) said that lenders have been “too cautious” in granting first-time-buyer home loans under current rules.
He argued that under existing regulatory rules lenders have a degree of “flexibility” over the stress tests they apply to homebuyers coming to the market for the first time, which they have not exercised.
Last November, Prime Minister Keir Starmer and Chancellor Rachel Reeves wrote to a range of regulators asking them to loosen rules that would allow for economic growth.
