CP26/18: Mortgage rule review – supporting first-time buyers and underserved consumers

Read CP26/18 (PDF)[2]

Why we are consulting

Some of our current rules may prevent creditworthy consumers from accessing mortgage products that suit their circumstances.  

We want to make targeted changes that give more people – including those with variable incomes, older borrowers, and those with past credit difficulties – a better chance of getting a mortgage they can afford.

We’re proposing changes in the following areas:

• Interest-only and part-and-part mortgages.
• Retirement interest-only (RIO) mortgages.
• Variable and irregular income.
• Foreign currency loans.
• Credit impaired.
• Bridging loans.

Our proposals keep responsible lending requirements in place and do not remove firms' duty to check that a mortgage is affordable.

Who this is for

This consultation is relevant to:  

• Mortgage lenders and administrators.
• Home purchase providers and administrators. 
• Mortgage intermediaries.  

It will also be of interest to:

• Industry groups and trade bodies.
• Consumer groups and organisations.
• Mortgage consumers.

Next steps

We welcome your feedback on these proposals by 28 July 2026.

You can respond using our online response forms or by emailing [email protected].

Response forms:

• Industry response form, including lenders, administrators and intermediaries[3].
• Consumer response form[4].

After the consultation closes, we’ll consider feedback and publish our final rules in a Policy Statement. We expect to do this by the second half of 2026.

We’ll also continue with policy development across the remaining 3 themes of the Mortgage Rule Review:  

• Enhancing later life lending.
• Enabling innovation.
• Protecting consumers in vulnerable circumstances.

Background

Following reforms introduced after the 2008 financial crisis, lending standards improved significantly, and the mortgage market became more resilient. However, those changes may also have made it harder for some creditworthy borrowers to access a mortgage.

In 2025, we published Discussion Paper DP 25/2[5] to explore these issues.

The proposals in this consultation build on responses to that paper and on our work with the Financial Ombudsman Service and the Prudential Regulation Authority.

The proposals support our objective to promote effective competition in the interests of consumers.

We’ve also published research on what factors contribute to people falling behind on mortgage payments.

Read our research note on risks to mortgage repayments[6].