The FCA has proposed a 2% increase in fees for mortgage lenders and brokers following a 9% hike last year.

In a consultation paper today, the regulator says that its annual funding requirement (AFR) has increased by around 4% from £755m in 2024/25 to £784m for 2025/26.

This proposed allocation to mortgage lenders and brokers, both of which fall into the A.18 group “home finance providers, advisers and arrangers”, is £23.5m for 2025/26.

This is up by 2% or by £0.5m from £23m for 2024/25.

The regulator has proposed the minimum Financial Ombudsman Service levy for mortgage lenders and advisers increase from £85 to £95 in 2025/26, which will raise an estimated £470,815.

The proposals suggest that lenders and brokers will also see increases to the levy they pay towards money guidance and debt advice, amounting to around £2m in extra costs.

In July, the FCA will publish its final fee schedule and the industry responses to this consultation.