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FCA Plans Mortgage Rule Overhaul to Rebalance Risk and Widen Access

The FCA will begin public consultation in early 2026 ahead of initial rule changes later in the year.

Overview

  • The regulator outlined four priorities: more flexible products for varied incomes, later‑life lending reforms, stronger protections for vulnerable borrowers, and greater use of data and AI in advice and disclosures.
  • It will launch a targeted market study on later‑life lending and review retirement interest‑only requirements to better reflect borrowing needs into older age.
  • Simplifying rules is intended to help first-time buyers, self‑employed workers and older homeowners whose earnings and circumstances change over time.
  • The FCA said 85% of the market has updated interest‑rate stress tests since March, allowing some buyers to borrow around £30,000 more.
  • Recent data cited by the regulator shows record lending to first‑time buyers, with £82.8bn advanced to 390,000 borrowers in the year to September 2025, according to Savills.