Overview
- The FCA published a consultation on Monday proposing targeted rule changes to widen mortgage access for groups it says are underserved, and it is seeking responses through an online tool with a July 28 deadline.
- One key proposal would drop the requirement for a borrower to have a credible repayment strategy when the interest-only slice is under 25% of a property’s valuation, allowing more part interest-only deals.
- The regulator would also allow certain follow-on retirement products, such as retirement interest-only or regulated lifetime mortgages, to count as acceptable repayment plans for older homeowners.
- The FCA wants lenders to use up-to-date, individualised affordability checks so people with variable incomes or foreign-currency pay and those with minor past credit issues are not automatically excluded.
- Industry groups welcomed the measures but warned that any real benefit for first-time buyers will also depend on lenders’ implementation and wider barriers such as housing supply and the ability to save deposits.