Latest news with #remortgage
The Independent
12 hours ago
- Business
- The Independent
Key changes to mortgage rules announced by the FCA
The Financial Conduct Authority (FCA) has confirmed simplified mortgage rules aimed at making it easier for homeowners to remortgage or reduce their loan terms. The FCA is removing guidance that has 'served its purpose', which is intended to reduce the regulatory burden on financial firms and allow borrowers to shorten their mortgage terms more easily. The requirement for a full affordability assessment will be lifted when a borrower seeks to reduce their mortgage term, though lenders are still expected to consider affordability diligently. These changes are anticipated to make it simpler for consumers to switch to new lenders for remortgaging, potentially allowing them to access cheaper products and improve their choices. The FCA stated these reforms support economic growth, help consumers save time and money, and encourage innovation in the mortgage market, while ensuring strong consumer protections remain in place.
Finextra
18 hours ago
- Business
- Finextra
FCA proposes reforms of mortgage rules
Borrowers will find it easier to remortgage, saving time and money, under changes confirmed today by the Financial Conduct Authority (FCA). 0 The package of measures is part of a series of reforms the regulator is undertaking to mortgage rules to help people navigate their financial lives and support growth by ensuring more people can benefit from choice in the mortgage market and the security of homeownership. Under these changes, borrowers will: • 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. • More easily remortgage with a new lender, helping them access cheaper products. • Be able to discuss options with their mortgage provider and get advice when they need it. 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 Financial Conduct Authority, 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'. As part of the changes, the FCA is also removing guidance that has served its purpose to reduce the regulatory burden. Reform of the mortgage market is possible because of the high standards set by the FCA. These include effective affordability checks, support for those who get into financial difficulty and the Consumer Duty, which requires lenders to achieve good outcomes for borrowers. Changes to the mortgage rules were included in the FCA's letter to the Prime Minister earlier this year, linking with the goals in its strategy to help consumers and support growth. While these changes are voluntary for firms, supporting sustainable home ownership and a competitive mortgage market is a collective responsibility. The FCA is playing its part and is encouraging firms to use these flexibilities to help broaden access, strengthen competition and support greater innovation and choice for consumers.
Yahoo
a day ago
- Business
- Yahoo
Homeowners could find it easier to remortgage or reduce their mortgage term
Some homeowners should find it easier to remortgage or reduce their mortgage term under changes confirmed by the City regulator to simplify rules and create more flexibility. The Financial Conduct Authority (FCA) said the shake-up is part of reforms to mortgage rules to help people navigate their financial lives. 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.'
The Independent
a day ago
- Business
- The Independent
Homeowners could find it easier to remortgage or reduce their mortgage term
Some homeowners should find it easier to remortgage or reduce their mortgage term under changes confirmed by the City regulator to simplify rules and create more flexibility. The Financial Conduct Authority (FCA) said the shake-up is part of reforms to mortgage rules to help people navigate their financial lives. 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.'
Daily Mail
06-07-2025
- Business
- Daily Mail
I pay my water bill annually: Could this get me rejected for a mortgage? DAVID HOLLINGWORTH replies
I pay my water bill annually, which costs about £500 per year. This usually works fine for me, but I've recently become concerned about how it affects my credit score. I've been checking my credit report online as I need to remortgage soon. I noticed that, as this year's water bill hasn't been sent to me yet, it shows on my credit report as having a £500 debt to the water company. Could this affect my mortgage application and is there anything I can do about it? My credit score is otherwise good. I don't have a meter, so am charged based on my home's rateable value rather than the amount of water I use. David Hollingworth replies: There's a lot to think about when searching for the right mortgage. Getting the best interest rate is key, but you also need to consider whether you and the property will meet the lender's criteria. There are several things borrowers need to keep in mind here, including their credit score and any marks on their file which could raise lender eyebrows. Can you afford this mortgage? The lender will want to understand your income, and also see a breakdown of your regular financial commitments and everyday outgoings. Those figures will feed into the lender's affordability calculation to determine the amount of borrowing that is affordable, and the maximum mortgage available to you. Although all lenders work on similar principles, they will each have their own calculation. The final amount you are offered will not only depend on income and outgoings, but also how the lender's 'stress test'. This is when they look at your proposed monthly mortgage payments, and check whether you could still afford them if the rate went up in future. If you are applying for a longer fixed rate deal, you may be able to borrow more. Many lenders have also eased back their mortgage stress rates after the regulator made clarifications around the options open to lenders. Are you a good borrower? The lender will also want to look at your credit profile to see if you are able to borrow responsibly. Lenders will be able to see your current credit commitments and track record of payments through your credit file, which will be held with an agency such as Experian or Equifax. They will also generally apply their own credit scoring to the application. There's no exact science to this and each lender will take a different approach. Having no track record of borrowing and paying it back can be an issue, as well as more obvious issues like late and missing payments. This is because it is harder for the lender to understand the risk. Having credit in place is not a bad thing as long as payments are up to date, which will help to demonstrate that you will be a good risk. A lower credit score could affect whether the lender can offer the level of borrowing required, or even offer lending at all. Credit reference agencies give easy access to your credit file now, so it's straightforward to be able to see what a lender is looking at for little or no expense. They may also provide an indicative credit score to give a feel of how you might be seen by a prospective lender. These don't necessarily tally with exactly the same approach that a lender will take but will give a useful benchmark. Will the water bill make a difference? You say your credit score is good, despite the water bill issue. This should provide you with confidence regarding your mortgage application, albeit no guarantee. The fact that the water bill is showing on your file is clearly temporary and the lender will be able to understand that it is a utilities bill. If that appeared to be £500 per month then a lender may have questions about whether it is something that would need to be factored into affordability, but it should be apparent that's not the case here. Some lenders already factor the average cost of utilities into their affordability modelling. It's therefore probably unlikely that the water bill will be an issue for you. However, if you are concerned that affordability is tight, speaking to a mortgage adviser should help to give a better overall picture. They will be able to look at deals from across the market and compare those to the options from your current lender. Once you have assessed the options, they can help put the right deal in place. David Hollingworth is This is Money's mortgage expert and a broker at L&C Mortgages - one of Britain's leading specialists. He is ready to answer your home loan questions, whether you are buying your first home, trying to remortgage amid the rates chaos or looking to plan further ahead. If you would like to ask him a question about mortgages, email: editor@ with the subject line: Mortgage help Please include as many details as possible in your question in order for him to respond in-depth. David will do his best to reply to your message in a forthcoming column, but he won't be able to answer everyone or correspond privately with readers. Nothing in his replies constitutes regulated financial advice. Published questions are sometimes edited for brevity or other reasons.
