CP19/14 response form

We are asking for comments on this Consultation Paper by by 26 June 2019.

Please use this online form or alternatively email: [email protected]

We make all responses to formal consultation available for public inspection unless the respondent requests otherwise. We will not regard a standard confidentiality statement in an email message as a request for non-disclosure.

Despite this, we may be asked to disclose a confidential response under the Freedom of Information Act 2000. We may consult you if we receive such a request. Any decision we make not to disclose the response is reviewable by the Information Commissioner and the Information Rights Tribunal.

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Q1: Do you agree that our proposals should only apply to firms dealing with consumers that meet the conditions of ‘eligible consumers’?

Q2: Do you agree that ‘up-to-date with payments’ should be decided by not being in payment shortfall, both at the time of application and over the previous 12 months?

Q3: Do you agree with our approach to defining a ‘more affordable’ mortgage, both where product or arrangement fees have been added to the mortgage and where they have not?

Q4: What are your views on a definition of ‘more affordable’ that refers to both the interest rate during any incentivised deal period and the new lender’s existing reversion rate at the time?

Q5: Do you agree that we should allow lenders to extend the term of the mortgage when they undertake the modified assessment?

Q6: Do you agree with our proposal to only allow lenders to use the modified affordability assessment if they have a policy allowing consumers to switch to a more affordable mortgage?

Q7: Do you agree that we should allow lenders that choose to use the modified affordability assessment to disapply our income and expenditure rules (MCOB 11.6.5R to 11.6.15G)?

Q8: Do you agree that we should require lenders to consider whether the consumer’s income after retirement would be enough to enable them to meet their commitments under the contract?

Q9: Do you agree that we should allow lenders that choose to use the modified affordability assessment to disapply our interest rate stress test rules (MCOB 11.6.18R to 11.6.19G)?

Q10: Do you agree that we should introduce guidance that, if considering future interest-rate rises, lenders may wish to take into account the fact that the consumer is currently meeting payments at a higher rate than on the more affordable mortgage?

Q11: Do you agree that we should allow lenders that choose to use the affordability assessment to disapply MCOB 11.6.40G to 11.6.48R and MCOB 11.6.50R to 11.6.52G as long as the consumer is not trying to increase the proportion of the loan on an interest-only basis?

Q12: Do you have views on whether the modified assessment should be available for home movers looking to switch to a new lender?

Q13: Do you agree that we should require inactive lenders and administrators acting for unregulated entities to contact their customers and make them aware that our rules mean they may be able to switch to a new mortgage product with a new lender?

Q14: Do you agree that administrators and inactive lenders should only contact customers that have a residential mortgage, that is not a lifetime mortgage, and who are up-to-date with payments and on a reversion rate?

Q15: Do you agree we should require lenders to give this disclosure?

Q16: Do you agree we should require lenders to report data on use of the modified affordability assessment?

Q17: Do you agree that we should amend SUP to state that, where lenders have sold a mortgage using the modified assessment, they are not required to report the affordability data required in PSD?

First published: 26/03/2019 Last updated: 26/03/2019