
Homeowners could find it easier to remortgage or reduce their mortgage term
The FCA is removing guidance that has 'served its purpose' to reduce the regulatory burden on firms.
Under the changes, borrowers could find it easier to reduce their mortgage term, helping to lower the total cost of borrowing and reduce the risk of repayment extending into retirement, the regulator said.
It is removing a requirement for a full affordability assessment when reducing the term of a mortgage, but lenders are still expected to consider affordability where they choose to use the changes.
For example, firms must act to avoid causing foreseeable harm and must monitor and regularly review the outcomes customers are experiencing, the regulator said.
People should also find it easier to switch to a new lender to remortgage, if they wish to, helping them to access cheaper products.
Consumers could see their choice improved by allowing for simpler affordability assessments, where a proposed remortgage is on similar terms to an existing contract, but more affordable than a new deal indicated by a customer's existing lender.
The FCA expects many borrowers to continue to benefit from regulated mortgage advice.
Lenders are expected to consider what is appropriate to identify consumers who need advice or other support.
Emad Aladhal, director of retail banking at the FCA, said: 'We are helping more people navigate their financial lives by supporting those who can afford to buy a home and supporting competition in the mortgage market.
'Consumer needs have changed over recent years, and our rules are changing too.
'Today's changes support growth by simplifying some of our rules, saving consumers time and money, while ensuring they still benefit from advice, where needed.
'We want lenders to use these changes to innovate and better serve aspiring homeowners and existing borrowers.
'These reforms are another significant step in our mortgage rule review, which we're delivering quickly.
'They are supported by the strong protections we've already put in place for consumers in the mortgage market.'
The regulator said reform of the mortgage market is possible due to the continuation of high standards, such as the Consumer Duty, which requires lenders to put customers at the heart of what they do, as well as effective affordability checks and support for people in financial difficulty.
The FCA's policy statement said regulatory reforms introduced after the 2008 financial crisis have improved standards across the mortgage market, with overall mortgage arrears and repossessions remaining low by long-term standards.
The regulator said that, while changes are voluntary for firms, supporting sustainable home ownership and a competitive mortgage market is a collective responsibility.
Changes to mortgage rules were included in the FCA's letter to Prime Minister Sir Keir Starmer earlier this year, linking with the Government's aims to support economic growth.
As part of its wider mortgage rule review, the regulator has opened a public discussion on the future of the mortgage market.
It is inviting feedback until September 19 2025.
Many lenders have recently made changes enabling some people to potentially borrow more, following clarification from the regulator.
Paul Matthews, senior director of risk at leading financial services consultancy Broadstone, said: 'The FCA is taking significant steps to make it easier for consumers to make changes to their mortgages and get better support on their available options.
'The easing of regulation will allow lenders greater flexibility to innovate in the market.'
Charles Roe, director of mortgages at UK Finance, said: 'The FCA's reforms are a welcome step to help lenders respond more effectively to customer needs and widen access to homeownership.
'Their optional nature means that firms can apply them in line with their own risk appetites. By reducing regulatory friction and enhancing switching flexibility, the reforms will enable the mortgage sector to continue to support the Government's growth agenda, by supporting both new and existing mortgage customers.'
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


The Sun
6 minutes ago
- The Sun
Insurance firms slammed for adding up to £51 a year to bills paid in monthly instalments
INSURANCE firms have been slammed for adding up to £51 a year to bills paid in monthly instalments. Customers may also pay more for the initial premium in a practice called 'double dipping'. The Financial Conduct Authority said monthly bill payers face APRs of 20-30 per cent, adding £19-£28 to home insurance and £35-£51 to car insurance costs. With about half of such policies paid monthly in 2023, many customers are hit with these extra costs simply because they can't afford annual payments. Consumer group Which? director Rocio Concha urged the FCA to crack down on 'bad practice'. She said too many customers are forced into higher costs out of financial necessity. Insurers claim the charges reflect the cost of the agreements. But the FCA's rules state that premiums must not be increased without a 'reasonable basis'. The Association Of British Insurers insists its members follow 'fair and transparent' principles. Earlier this year Which? revealed that some firms charge APRs comparable to credit card rates, with One Insurance Solution and The Insurance Factory imposing above 30 per cent. The FCA also found motor insurance claims were subject to delays, lack of oversight on outsourced services and high complaint levels. It is taking action against the companies involved. FOOD CRUNCH GROCERY bills are biting harder as food prices rise at their fastest rate in 18 months. Inflation hit 5.2 per cent this month, adding an average £275 to annual spending, Worldpanel data showed. Grocery spending rose 4.6 per cent in the 12 weeks to July 13, with online grocer Ocado leading growth at 11.7 per cent. Lidl grew 11.1 per cent while leader Tesco saw a 7.1 per cent sales increase. RANSOMS BAN PUBLIC sector organisations including the NHS, schools and councils will be banned from paying ransoms to cybercriminals. Security Minister Dan Jarvis pledged to 'smash the cybercriminal business model' and safeguard essential services. Businesses outside the ban must now tell authorities before paying ransoms. The new rules come after attacks on Marks & Spencer and the Co-Op. GOOD WORKS PAY OFF THE WORKS is celebrating success in its turnaround strategy as profits surged 20 per cent to £8.3million. The books and stationery retailer saw 6.4 per cent growth in like-for-like sales in its final quarter, driven by improved store standards and new products, despite a 2 per cent dip in annual revenues. Online sales struggled but store sales led the charge. Boss Gavin Peck highlighted strong trading in the new financial year, with sales up 5 per cent. Shares jumped 9.4 per cent yesterday


Times
34 minutes ago
- Times
Rachel Reeves warned that deregulation risks financial crisis
The governor of the Bank of England has warned Rachel Reeves that cutting red tape on the banking sector risks sparking another financial crisis as he downplayed the rise in UK government debt costs. Andrew Bailey told a group of influential MPs on Tuesday that rolling back restrictions on the City and ditching bank ringfencing guidelines could destabilise the UK financial system and 'would not be [a] sensible' decision for the time being. In a near two-hour long session with the Treasury select committee before the parliamentary summer recess, Bailey also said that the rise in long-term government debt costs was not 'unique' to the UK. He said investors were ditching US assets to curb their exposure to the dollar owing to concerns about the economy since President Trump returned to the White House. The governor, who, alongside his role at the central bank, recently took up the chairmanship of the Financial Stability Board, said he could understand why some people would think that 'the financial crisis is now way in the past, we've got past that, that's all solved, that's all out of the way, move on'. However, he said that 'for those of us who were veterans of sorting the problems of [the financial crisis] out' there remained a live threat to financial stability which required lawmakers to retain robust regulations. His comments come after the chancellor told bankers at the annual Mansion House dinner this month that the UK's regulatory regime was a 'boot on the neck' of businesses which risked 'choking [them] off'. Bailey, 66, said he would not have used such phrasing. Reeves announced that the government would reform laws that require lenders to separate their retail and investment banking businesses, a requirement put in place after the 2008 global financial crisis to shield depositors from banks' riskier activities. Several City grandees, including Sir John Vickers, the architect of the ringfencing rules, have expressed concern at the government's deregulation drive, which is intended to reverse weak economic growth. Bailey also downplayed the rise in UK government borrowing costs and said that it was part of a worldwide trend created by Trump's volatile tariff policymaking and a general rise in public deficit spending. 'We've seen an increase in term premium in government bond markets… yield curves have steepened', Bailey said, adding this was 'a global phenomenon, it is not in any sense unique [to the UK]'. The rate on the 30-year UK government bond, or gilt, stands at 5.43 per cent, up from 4.67 per cent compared to a year ago. The yield, which moves inversely to prices, on the US equivalent has risen to 4.93 per cent from 4.48 per cent over the same period. Bailey's comments come as figures from the Office for National Statistics on Tuesday showed that UK debt interest spending jumped to £16.4 billion in June, the second-highest for that month since the records began in 1997. Government borrowing topped £20 billion in the month also, above the Office for Budget Responsibility's projection for the month, strengthening expectations for tax increases at the autumn budget. Trump's erratic decision-making on how much to tax imports from specific countries had led to 'rebalancing' among markets 'which involves a reduction in exposure to dollar assets', Bailey said. The dollar index, which measures the greenback against six comparable currencies, is down nearly 10 per cent since the start of the year. The governor said that, judging by conversations with market participants and based on granular data, 'the most crowded trade in the market at the moment is short dollar'. He said that since Trump first announced his 'reciprocal tariffs' in April, there had been 'a breakdown in established correlations in markets'. Stock markets globally jolted lower in the immediate aftermath of Trump's first tariff announcements, with the S&P 500 index posting one of its largest losses since the Great Depression. However, an equity rally has since pushed several indices to a record high. This week, the FTSE 100 closed at its highest-ever level of just over 9,000 points. Taxes on goods imported to the US from most countries will increase sharply from August 1 after Trump delayed the implementation of his 'reciprocal tariffs' several times.


The Independent
2 hours ago
- The Independent
I care more about getting a family on the housing ladder than snails
Rachel Reeves has said that she cares 'more about getting a young family on the housing ladder than I do about protecting some snails' as she defended the Government's planning bill. Speaking to the House of Lords economic affairs committee on Tuesday, the Chancellor urged parliamentarians to get the flagship Planning and Infrastructure Bill into law quickly as ministers look to reach their targets on housebuilding and major projects. The Chancellor was facing questions on Government amendments to the legislation designed to strengthen environmental protections, which one peer suggested would 'make it easier' than in the original plans 'to block and delay things'. The Government has pledged to reach decisions on 150 infrastructure projects and building 1.5 million homes over the course of this Parliament. The Chancellor said that ministers are of the view that their amendments do not 'water down' or 'weaken' the bill, and asked for people to be 'sympathetic' towards the legislation as it heads towards the statute book. Ms Reeves, who represents the Leeds West and Pudsey seat went on: 'The reason that HS2 is not coming to my city of Leeds anymore anytime soon, is because I'm afraid, as a country, we've cared more about the bats than we have about the commuter times for people in Leeds and West Yorkshire, and we've got to change that, 'Because I care more about a young family getting on the housing ladder than I do about protecting some snails, and I care more about my energy bills and my constituents than I do about the views of people from their windows.' A £100 million tunnel to protect bats along the route of the high-speed rail project has been singled out by ministers for criticism.