The Financial Conduct Authority (FCA) has confirmed changes to mortgage rules, making it easier for borrowers to remortgage and reduce their mortgage term.
The measures are aimed at helping people save money and time, and to give them more choice in the market.
Under the new rules, borrowers will find it simpler to reduce their mortgage term and remortgage with a new lender.
They will also be able to discuss options and seek advice from their mortgage provider when needed.
The FCA said it expects many borrowers to keep benefiting from regulated mortgage advice, and lenders should identify when customers need extra support.
Emad Aladhal, director of retail banking at the FCA, said: “We are helping more people navigate their financial lives by supporting those who can afford to buy a home and supporting competition in the mortgage market.
“Consumer needs have changed over recent years, and our rules are changing too.
“Today’s changes support growth by simplifying some of our rules, saving consumers time and money, while ensuring they still benefit from advice, where needed.”
Aladhal added: “We want lenders to use these changes to innovate and better serve aspiring homeowners and existing borrowers.
“These reforms are another significant step in our mortgage rule review, which we’re delivering quickly.
“They are supported by the strong protections we’ve already put in place for consumers in the mortgage market.”
Nick Jones, mortgage sales and marketing director at Access FS, said: “The simplified affordability assessments and retirement of outdated guidance are very promising steps forward; this paints the FCA in a positive light as a dynamic, pragmatic regulator – it’s clearly a watchdog that is rebalancing rulebooks to align with the government’s growth agenda.
“These changes are set to allow homeowners to benefit from cheaper products and save them time and money.
“By allowing lenders to respond to demands more constructively and effectively, it will support competition among banks, building societies and other lenders.”
Jones added: “The thing that gives me pause is that the FCA has eliminated the rule requiring regulated advice for interactive mortgage discussions.
“I’m not comfortable with borrowers having conversations with lenders about switching products without consulting a mortgage broker.
“Good customer outcomes depend on good advice.”
Matt Harrison, customer success director at Finova Broker, said: “These reforms mark a positive shift in the right direction — simplifying the rules will help reduce barriers for borrowers, but also for the advisers and lenders working hard to guide them through an increasingly complex mortgage market.
“At Finova, we see first-hand how vital streamlined processes and clear advice are to driving better outcomes.
“Easing the remortgaging process and allowing more flexibility around term changes gives brokers more tools to work with — but also places greater emphasis on tech-enabled support to navigate those options efficiently and compliantly.”
Harrison added: “As distribution evolves, the importance of intelligent sourcing, accurate case tracking, and joined-up lender-broker communication will only grow.
“These reforms open the door for firms to rethink how they deliver advice and value — and technology will be the backbone of making that happen.
“We welcome the FCA’s recognition that innovation and strong consumer outcomes go hand-in-hand, and we look forward to continuing to support brokers with the systems and insight they need to make the most of these changes.”
