Shake-up for simpler rules

Homeowners could find it easier to remortgage or reduce their mortgage term

- 

Some homeowners should find it easier to remortgage or reduce their mortgage term under changes confirmed by the City regulator to simplify rules and create more flexibility.

The Financial Conduct Authority (FCA) said the shakeup is part of reforms to mortgage rules to help people navigate their financial lives.

The FCA is removing guidance that has “served its purpose” to reduce the regulatory burden on firms.

Under the changes, borrowers could find it easier to reduce their mortgage term, helping to lower the total cost of borrowing and reduce the risk of repayment extending into retirement, the regulator said.

It is removing a requirement for a full affordability assessment when reducing the term of a mortgage, but lenders are still expected to consider affordability where they choose to use the changes.

For example, firms must act to avoid causing foreseeable harm and must monitor and regularly review the outcomes customers are experiencing, the regulator said.