FCA Doubling Help for Mortgage Prisoners

The Financial Conduct Authority (FCA) has confirmed that mortgage customers that are trapped due to newer affordability checks that started after their mortgage was opened will be able to get extra extra help in securing new mortgage options with a 'double pronged' attack.

New 'Looser' Affordability Checks

The new rules will see lenders using a different affordability assessment and customers who meet criteria like being up to date with their existing mortgage payments, not looking to move house or borrowing more money.  In short, the ability to 'pay/afford a mortgage' stress tests will be softened if you have kept up to date with mortgage payments on a mortgage that new affordability now offer a result that you technically cannot affor it, but despite all of that, you have been able to pay it and keep up to to date.

The FCA has also suggested that customers that are with unregulated lenders that they will be contacted and advised that they can switch to another regulated lender.  Executive Director of Strategy and Competition at the FCA, Christopher Woolard said:  “Steps are being taken to help mortgage customers with unregulated or inactive lenders to be able to switch lenders and save money”.

Borrow More to Pay Adviser Fees

In the second major concession, given that this type of mortgage advice may be costly to arrange, the FCA proposes to allow eligible customers to finance product arrangement and intermediary fees through their new mortgage.  In short, you can borrow to pay for advice to get your new mortgage set up to release you being a 'mortgage prisoner' trapped in an uncompetitive standard variable rate.

Comment

We are delighted the above although we urge caution on the 'borrowing' to pay the fees and we welcome the fact that the FCA has worked closely with firms to be ready for the new rules so the customers can benefit from the changes as soon as they come into force.