The FCA has launched a ‘public discussion on the future of the mortgage market’, with responsible risk-taking, alternative affordability testing, lending into later life and consumer information needs all on the agenda.
‘We’re seeking feedback on our proposals to simplify some responsible lending and advice rules for mortgages, making it easier, faster and cheaper for consumers to make certain changes to their mortgage and engage with their provider,’ the organisation said.
The online response form will be open until 4 June, and is part of the work plan the FCA set out in a letter to the prime minister in January. The 50 commitments made by the organisation in support of economic growth include reducing the regulatory burden on lenders to simplify home lending, support home ownership and ‘open a discussion on the balance between access to lending and levels of default’.
‘We want to make it easier, faster and cheaper for borrowers to make changes to their mortgage,’ the FCA said in its announcement this week. ‘Doing so will help consumers better navigate their financial lives and support growth, both priorities in our new strategy.’
The consultation will support greater choice and ease of access to options for customers, and guidance that is no longer required will be removed to ‘provide greater opportunity for innovation’, the FCA added.
“Our five year strategy commits to helping people navigate their financial lives and supporting the competitiveness of financial services. Now with the introduction of the Consumer Duty which sets clearer, up-to-date standards in financial services, we want to remove guidance that’s no longer required and provide greater opportunity for innovation.”
The consultation proposes ways to make it easier to remortgage with a new lender, reduce the overall cost of borrowing through term reductions, and discuss options with a firm whilst still having the option to seek advice if needed
Emad Aladhal, director of retail banking said:
“Our strategy aims to deepen trust and rebalance risk to support growth and improve lives.
“That’s why, with the Consumer Duty now in place to maintain high standards, we want to make it easier, faster and cheaper for borrowers to access and make changes to their mortgage.”
