We are proposing changes to our rules to reduce regulatory barriers to consumers who are up-to-date with payments and not looking to borrow more switching to a more affordable mortgage.
The Mortgage Market Study found that some consumers cannot switch to a more affordable mortgage despite being up-to-date with their mortgage payments. This includes so called ‘mortgage prisoners’.
To reduce the barriers these consumers face now or could face in future, we are proposing to amend our responsible lending rules and guidance so that mortgage lenders can choose to undertake a modified affordability assessment where the consumer:
Under the modified assessment, mortgage lenders must not enter into a new regulated mortgage contract with an eligible consumer unless they can demonstrate that the new mortgage is more affordable than their present one.
We are also proposing that:
This consultation will be directly relevant to:
This consultation will also be relevant to stakeholders with an interest in the mortgage market, including:
We want to hear your feedback on our proposals. Please send us your comments by 26 June 2019.
You can also:
We will consider all the feedback and intend to publish rules in a Policy Statement in late 2019.