Product sales data: new mortgage requirements: sales data FAQs

Read FAQs which apply when PS 19/23 comes into effect

Sales data FAQs

Q: How do we report affordability data where there has been no affordability assessment (eg because no affordability assessment is required by MCOB 11.6, such as for interest roll-up mortgages; or, where there has been no affordability assessment where the MCOB 11.7 transitional arrangements have been used)?

A: Report zeros for the affordability items.
 

Q: Is there a definition of a ‘dependant’?

A: The purpose of asking for dependants is to help us get a feel for the degree of expenditure that the borrower(s) may be responsible for. There is no formal definition of a dependant, but we would expect someone to be reported as a dependant where they are a member of the household and financially dependent on the borrower(s). This could potentially include a partner or other relative.

In the case of dependant adults, the rules require them to be reported as a dependant only where they have no income included in the affordability assessment. Note that it does not necessarily follow that a relative in the household is a dependant, as they may have their own financial means (eg employment or pension).
 

Q: Which interest rate stress test should be reported where the mortgage has more than one part (and therefore where each part may receive different treatment under the interest rate stress test requirement in MCOB 11.6)?

A: Firms are required to report either the actual stress rate, or where the rate is fixed for 5 years or more, the fixed rate.

If the loan is split into more than one part, the general rule (unless otherwise stated) is that the item should be completed with reference to the largest part of the overall mortgage balance (as per the notes on specific reporting fields in the Handbook text - see note (2) on page 8 of PS12/16). This applies in the case of the stress test rate.

So, where the largest part of the mortgage is on a rate fixed for more than 5 years, report the fixed rate.
 

Q: What should be reported in the sales data report for ‘size of loan’, if the advance is made up of multiple parts?

A: Report the size of mortgage at the date of completion. This may be made up of more than one part. It should also include fees and charges added to the loan.
 

Q: When should a mortgage be reported in sales data when there are multiple releases of funds (e.g. staged payments)?

A: Report only the amount of the initial advance. ie the first drawdown of funds. Additional release of funds will be picked up through the performance data.  
 

Q Where there are multiple releases of funds during the reporting period, do these need to be reported in the sales data?

A: Only the amount of the initial advance should be reported in the sales data. Additional release of funds will be picked up through the performance data.
 

Q: For the item ‘How the sale was made’, the same code ‘I’ appears for both ‘direct internet’ and for ‘internet’. Was this intended or was it an FCA drafting error?

A: This was an error. Report ‘E’ for direct internet. Report ‘I’ for intermediary. The Handbook is being corrected.
 

Q: Should ‘Right to Buy’ be reported as a Government initiative, ie against the item ‘Was this mortgage advanced under a Government-supported initiative?

A: No. Right to Buy will be captured in the item ‘Type of borrower’ under the option ‘C’ (council/registered social landlord tenant exercising their right to buy).
 

Q: How should mortgage term be reported in sales data – in months or years? 

A: For new sales where the mortgage account was opened on or after 1 January 2015, you must report mortgage term in months.

If you re-submit data on sales where the mortgage account was opened before 1 January 2015, you must report the term in years, as per the original submission.
 

Q: When should the 'Protection plan', 'Borrower gross income', 'Remortgage purpose' and 'Income basis' fields be reported?

A: These data items are relevant only to mortgages that completed prior to 2015, and therefore were originally reported in the old pre-2015 PSD format. They are to be used where data originally provided to us is found to be incorrect and that transaction has to be resubmitted.

 

FAQs which apply when PS19/23 comes into effect

 

Q: What transactions should be reported as an internal product transfer?

A: Our reporting rules make clear that for PSD reporting purposes, an “internal product transfer” means where a borrower under a regulated mortgage contract does not change lender but transfers internally to a different mortgage product, or renews their existing product, with no additional borrowing (other than product fees or arrangement fees added to the outstanding amount), whether or not the transfer involves a new regulated mortgage contract.
 

Q: There are a number of fields in PSD sales data which are not relevant for internal product transfers such as ‘market value of the mortgaged property’ – how should these be reported?

A: Our reporting rules make clear that a number of data items should not be reported where it is an internal product transfer.  Where relevant the rules use the phrase “In the case of an internal product transfer, do not report this data element” and the reporting system has been set-up to reflect this where ‘Mortgage type’ includes ‘PT’.
 

Q: How should second charge mortgages be reported where they are also an internal product transfer?

A: More than one code can be entered for ‘Type of mortgage’ and in this example both ‘SC’ and ‘PT’ should be reported.
 

Q: How should a change to a lifetime mortgage, which is also an internal product transfer, be reported?

A: More than one code can be entered for ‘Type of mortgage’ and in this example both ‘L’ and ‘PT’ should be reported.
 

Q: What ‘type of borrower’ should be reported for an internal product transfer (i.e. ‘Type of mortgage = PT’)?

A: Only one code can be entered for ‘Type of borrower’ and if the ‘Mortgage type’ is ‘PT’ then ‘Type of borrower’ will always need to be reported as ‘I’.
 

Q: How should a further advance be reported?

A: Report ‘Type of mortgage’ = ‘FA’ for a further advance under the same regulated mortgage contract, and report ‘FN’ for a further advance under a new regulated mortgage contract.
 

Q: Which first charge transactions should be reported as further advances?

A: Our reporting rules state that for the purposes of PSD reporting a further advance means a further loan to an existing borrower of the firm and which is secured on the same property, whether under a new mortgage contract, or by variation to an existing mortgage contract.
It should be noted that where a further advance is made for a first charge mortgage borrower, and the further advance is structured as a second charge mortgage, this would be reported as a new second charge mortgage, and not as a further advance.
 

Q: Which second charge mortgage transactions should be reported as further advances?

A: Our reporting rules include that for the purposes of PSD reporting a further advance means a further loan to an existing borrower of the firm and which is secured on the same property, whether under a new mortgage contract, or by variation to an existing mortgage contract. It is also states that a “further advance” includes a loan secured by a second or subsequent charge but only if the firm also has the benefit of the first (or previous) charge.

Therefore, where a further advance is made on an existing second charge mortgage then this should be reported as a further advance, but also flagging it is a second charge mortgage with the appropriate ‘type of mortgage’ code (i.e. ‘SC’). As data item ‘Mortgage type’ can be reported as more than one code, the relevant codes would be “FA” (further advance under the same mortgage contract) or “FN” (further advance under a new mortgage contract) and “SC” (second charge).
 

Q: Should drawdowns be reported as further advances?

A: Drawdowns of pre-arranged sums are not to be reported as further advances in sales data report (PSD001) as they are not additional lending (on the assumption they have already been underwritten). This includes pre-agreed sums drawn down for offset and lifetime mortgages. However, where additional borrowing above the pre-arranged sum is agreed and drawn down, including for offset and lifetime mortgages, this should be reported as a further advance, but also flagged with the appropriate codes for that type of mortgage (eg a lifetime mortgage).
 

Q: When should a mortgage be reported in sales data when there are multiple releases of (pre-arranged) funds (eg staged payments)?

A: Report only the amount of the initial advance ie the first drawdown of funds. Additional release(s) of funds will be picked up through the performance data.
 

Q: Should transfers of equity be reported as further advances?

A: No, transfers of equity (which may take place, for example, in connection with a divorce) should not be reported as further advances unless there has been a further advance of funds and thus meets the definition of a further advance in the reporting rules.
 

Q: Should porting be reported as a further advance?

A: No, Porting should not be reported as a further advance as the definition of a further advance is limited to advances secured on the same property as the existing mortgage contract.​​​​​​​​​​​​​​
 

Q: For which transactions should the purpose of the loan be reported?

A: Data for `the purpose of a further advance, or extra money withdrawn on a remortgage, or a second charge regulated mortgage contract’ should be reported on for all further advances (whether under a first or subsequent charge) as well as remortgages and second charge loans.​​​​​​​​​​​​​​
 

Q: For ‘Date of mortgage transaction’ what date should be reported for internal product transfers?

A:`Date of mortgage transaction’ is the date of mortgage completion or draw down of funds.  In the case of an internal product transfer or other internal remortgage, this should be the date the new account is opened, or the rate change or product switch is effected.​​​​​​​​​​​​​​
 

Q: For which transactions should ‘original transaction reference’ be reported and which reference is this?

A: Our reporting rules make clear that this data element only needs to be reported where there is a further advance or an internal product transfer or other internal remortgage. It means the transaction reference of the mortgage when originally reported.

If the mortgage is an internal remortgage or the result of a series of internal remortgages, report the transaction reference of the earliest predecessor mortgage in that series.

If that predecessor mortgage predates sales data reporting (ie the original mortgage transaction pre-dates 1 April 2005), report “predates”.

If the transaction reference to be reported is not known, report “unknown”.
 

Q: For which transaction should ‘Date of original mortgage transaction’ be reported?

A: Only report this data element where there is a further advance or internal product transfer or other internal remortgage.  Report the date of the mortgage transaction when originally reported.

If the mortgage is an internal remortgage or the result of a series of internal remortgages, report the transaction date of the earliest predecessor mortgage in that series.

If that predecessor mortgage predates sales data reporting (ie the original mortgage transaction pre-dates 1 April 2005), or if the date to be reported is not known, report “01/01/1900”.
 

Q: Where no valuation has taken place, how should this be reported?

A: This should be reported using code ‘N’.​​​​​​​
 

Q: How should variations to a regulated mortgage contract be reported in the sales data report where they are not reportable as either new sales, internal product transfers or further advances eg change of borrowers; reversion to SVR; term extensions; transfers of equity or security without additional borrowing?

A: Contract variations that are not internal product transfers nor further advances do not need to be reported in sales data report (PSD001).  Instead, we will monitor such variations through performance data report (PSD007).
 

Q: What should be reported for data item ’The total amount owed by the borrower to the firm and secured on the property immediately prior to the new borrowing’?

A: Our reporting rules make clear that:

  • For a new mortgage contract, report the total amount owing to the firm and secured on the property that is outstanding immediately prior to the new mortgage advance. 
  • For a further advance under an existing regulated mortgage contract (which constitutes a variation to that mortgage contract), report the amount owed to the firm and secured on the property immediately prior to the making of that further advance. 
  • Where there is a further advance under an existing regulated mortgage contract which is a second charge regulated mortgage contract, report the amount owed to the firm and secured on the property immediately prior to the making of that further advance.
  • In the case of an internal product transfer, do not report this data element.
  • It should be noted that the total amount owed by the borrower to the firm, is not limited to amounts secured by regulated mortgage contracts, but includes any borrowing secured on the property.

 

Q: What should be reported for data item ‘For a second charge regulated mortgage contract, the total amount owed by the borrower to third parties secured on the property’?

A: Our reporting rules make clear that firms should, for second charge mortgages:

  • Report the total amount owing to third parties and secured on the property at the time of the mortgage advance or further advance, as relevant. 
  • This data element is not limited to amounts secured by regulated mortgage contracts, but includes any borrowing secured on the property.
  • In the case of an internal product transfer, do not report this data element.

 

​​​​​​​Q: How should affordability data be reported where there has been no affordability assessment (eg because no affordability assessment is required by MCOB 11.6, such as for interest roll-up mortgages)?
product sales data-policy-business-faqs/mortgages?

A: Do not report data for the affordability items where no affordability assessment has been undertaken.

 

Q: Is there a definition of a ‘dependent’?

A: The purpose of asking for dependents is to help us get a feel for the degree of expenditure that the borrower(s) may be responsible for. There is no formal definition of a dependent, but we would expect someone to be reported as a dependent where they are a member of the household and financially dependent on the borrower(s). This could potentially include a partner or other relative.

In the case of dependent adults, the rules require them to be reported as a dependent only where they have no income included in the affordability assessment. Note that it does not necessarily follow that a relative in the household is a dependent, as they may have their own financial means (eg employment or pension).
 

Q: For the data item ‘Stress tested interest rate used to assess the effect of future interest rate rises on affordability’, which interest rate stress test should be reported where the mortgage has more than one part (and therefore where each part may receive different treatment under the interest rate stress test requirement in MCOB 11.6)?

A: Firms are required to report either the actual stress rate, or where the rate is fixed for 5 years or more, the fixed rate. If the loan is split into more than one part, the principle (unless otherwise stated) is that the item should be completed with reference to the largest part of the overall mortgage balance. This is set out in the Handbook notes (SUP 16 Annex 21R) as follows:

(c) Mortgages
……..
Notes:
(1) ……
(2) In the case of mixed interest rate options/combination mortgages or where the loan is otherwise split into more than one part, a reporting field should be completed by reference to the largest portion of the overall mortgage balance unless otherwise stated. This applies in the case of the stress test rate, so where the largest part of the mortgage is on a rate fixed for more than 5 years, firms should report the fixed rate.​​​​​​​

 

Q: There are 2 data items related to the stress test – how are these different?
A: The 2 data items are different:

  • ‘Stress tested interest rate used to assess the effect of future interest rate rises on affordability’ requires the actual rate used to be reported eg sum of product rate plus any increment or flat rate; 
  • ‘Rate to which the stress test applied’ requires the interest rate to which the stress was applied to produce the rate reported for the previous data item.
     

Q: When will the contractual reversion rate data item need reporting?

A: The contractual reversion rate is the rate which, at the date of the mortgage transaction being reported, is expected to apply at the end of any initial incentivised or fixed rate periods. If this contractual reversion rate is the same as the rate which is reported for the previous data item ’rate to which the stress test is applied’, do not report this data element.​​​​​​​
 

Q: What should be reported in the sales data report for ‘size of loan’, if the advance is made up of multiple parts?

A: Report the size of mortgage at the date of completion. This may be made up of more than one part. It should also include fees and charges added to the loan.
 

Q: What should be reported in the sales data report for ‘size of loan’ if it is an internal product transfer?

A: Report the balance immediately after the transfer. Include any fees and charges added to the loan.​​​​​​​
 

Q: Should ‘Right to Buy’ be reported as a Government initiative, ie against the item ‘Was this mortgage advanced under a Government-supported initiative?

A: No. Right to Buy will be captured in the item ‘Type of borrower’ under the option ‘C’ (council/registered social landlord tenant exercising their right to buy).​​​​​​​
 

Q: How should mortgage term be reported in sales data – in months or years? 

A: Months. If it is an internal product transfer or other internal remortgage, or a further advance, report the remaining term at the time of the transfer, remortgage or advance.
 

Q: What is the 'cancellation' element of the XML file designed to capture?

A: The cancellation element allows firms to cancel PSD transactions previously submitted to us eg if incorrect data has been submitted.​​​​​​​
 

Q: How should retirement interest-only (RIO) mortgages be reported in product sales data PSD001? 

A: As follows:

  • ‘Type of mortgage’ should be reported as ‘RI = retirement interest-only mortgage’. 
  • ‘Method of repayment’ should be reported as ‘I = interest-only’. 
  • ‘Is this an interest roll-up’? should be reported as ‘No’. 
  • ‘Term of mortgage’ - it is not possible to enter anything into this field if ‘type of mortgage’ is ‘RI’.
  • ‘Type of borrower’ could be reported as any of the codes (depending on the customer’s situation). RIOs would not generally be expected to be reported as type ‘O’ unless they are on a second charge basis. 
  • ‘Repayment strategy’ can be reported using one of the several codes available (such as ‘M = sale of mortgaged property’) but would not be expected to be reported as ‘L’.  Code ‘L’ would only be relevant where it was known at the outset that the customer would be granted a lifetime mortgage to refinance the RIO. 

​​​​​​​​​​​​​​Q: My firm has not transacted any new sales, internal product transfers, nor further advances, during the reporting period. Do we need to report PSD?

A: If no sales, internal product transfers, nor further advances have been transacted, then we will expect firms to submit a nil return.