Finance News

Story: FCA Mortgage Overhaul Targets Self-Employed and First-Time Buyers With New Flexibility Rules

By Steven Anderson

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What the FCA Actually Wants to Change. The core ask is flexibility. The FCA wants lenders to have more room to assess a borrower's full,…

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99% of Mortgages Since 2014 Haven't Hit Arrears. Here's the number that probably matters most for anyone skeptical about loosening standards.

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Consultation Open, Deadline Late July. The FCA is running an active consultation and wants to hear from consumers, lenders, and anyone…

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Britain's financial watchdog wants to tear up parts of the mortgage rulebook. The Financial Conduct Authority has put forward a package of reforms aimed at making home loans more…

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The proposals, laid out in consultation paper CP26/18, aren't subtle. They go after some of the most stubborn friction points in the current framework — the ones that push…

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The core ask is flexibility. The FCA wants lenders to have more room to assess a borrower's full, current financial picture rather than knocking people out early because of minor…

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For the self-employed, the proposals would reduce barriers around variable income — basically giving lenders clearer permission to work with applicants whose earnings fluctuate…

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Older borrowers get attention too. The FCA wants to update guidelines around retirement interest-only mortgages, which let homeowners access equity without a fixed repayment…

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And on interest-only mortgages more broadly, the FCA is pushing for more flexibility — though with a caveat. Most borrowers would still need a clear repayment plan in place.

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The implication is pretty clear: the rules introduced after the 2008 financial crisis did their job, maybe too well in some corners of the market.

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See also: FCA Takes Neil Woodford and W4.0 to Court Over Unlicensed Advice Site

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That balance — more lender discretion, no weaker consumer safeguards — runs through everything in CP26/18.

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The FCA's Consumer Duty, which set a high bar for how firms must treat customers, isn't going anywhere. The new proposals sit on top of that foundation, not in place of it.

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The feedback will shape how the final rules get written. So the version of CP26/18 that eventually becomes law could look different from what's on the table right now.

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