The FCA has confirmed a new package of measures for mortgage borrowers as part of a series of reforms the regulator is undertaking to mortgage rules.
Under these changes, borrowers will be able to more easily remortgage with a new lender, helping them access cheaper products.
The FCA will also make it easier for borrowers to reduce their mortgage term, helping to lower the total cost of borrowing and reduce the risk of repayment extending into retirement.
The regulator says it expects "many borrowers to continue to benefit from regulated mortgage advice". This follows the regulator admitting that the plans to amend its mortgage advice and selling standards "may affect the total volume of advice being given".
In its latest update, the FCA stressed that lenders are "expected to consider what is appropriate to identify consumers who need advice or other support".
While these changes are voluntary for firms, the regulator says it is "encouraging firms to use these flexibilities to help broaden access, strengthen competition and support greater innovation and choice for consumers".
As part of the changes, the FCA is also removing guidance "that has served its purpose" to reduce the regulatory burden.
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."
Matt Harrison, customer success director at Finova Broker, commented: "These reforms mark a positive shift in the right direction — simplifying the rules will help reduce barriers for borrowers, but also for the advisers and lenders working hard to guide them through an increasingly complex mortgage market.
“At Finova, we see first-hand how vital streamlined processes and clear advice are to driving better outcomes. Easing the remortgaging process and allowing more flexibility around term changes gives brokers more tools to work with — but also places greater emphasis on tech-enabled support to navigate those options efficiently and compliantly.
“As distribution evolves, the importance of intelligent sourcing, accurate case tracking, and joined-up lender-broker communication will only grow. These reforms open the door for firms to rethink how they deliver advice and value — and technology will be the backbone of making that happen.
“We welcome the FCA’s recognition that innovation and strong consumer outcomes go hand-in-hand, and we look forward to continuing to support brokers with the systems and insight they need to make the most of these changes."
