Find out more about our mortgage rule review, including the work we’ve done so far and how it impacts your firm.
Our mortgage rule review aims to simplify our mortgage rules to support sustainable home ownership.
Our review is part of our 5-year strategy[1], which sets out to support growth and help consumers navigate their financial lives. It also forms part of the work announced in our letter to the Prime Minister[2] to support home ownership and the UK economy.
Regulatory and industry reforms have raised mortgage lending standards. This has led to a more resilient market, with fewer people in arrears and our rules helping consumers in financial difficulty get the support needed for their individual circumstances. But this more cautious approach may also have restricted some creditworthy consumers' access to the market.
How this affects firms
We want to make sure the sector is ready to support consumers with the options they need.
With the introduction of the Consumer Duty providing higher standards of protection for consumers, firms have the flexibility to help more people become homeowners and we’re encouraging them to use it.
Below are the changes and communications we’ve made so far, and what these mean for firms.
Flexibility in our stress test rule
We reminded lenders of flexibility in our existing stress test rule, to help more people access the affordable mortgage they need.
Firms have flexibility to design their test in a way that is appropriate for the customer's mortgage.
Read further information[3] on how these flexibilities should be applied.
Discussion Paper on future of the UK mortgage market
Our Discussion Paper[4] launched a public conversation on the future of the UK mortgage market.
It considered areas where changes may be needed to support home ownership and economic growth.
We asked if there are areas where introducing further flexibility in our rules could allow firms to innovate and tailor their product offerings to meet consumers' evolving needs.
We also asked about areas where there may be scope to rebalance risk appetite to improve access to mortgages.
Final rules supporting greater choice in the mortgage market
We’ve made changes to our rules[5] to support greater choice in the mortgage market. These make it easier for consumers to:
- remortgage with a new lender
- reduce their mortgage term
- speak to a mortgage adviser about their mortgage needs
Firms can now:
- make use of the modified affordability assessment when the mortgage product a new lender can offer is more affordable than the new mortgage product with the current lender
- reduce the term of a customers mortgage term without needing to complete a full affordability assessment
- interact with their customers without this automatically triggering the need to provide regulated advice
While these changes are voluntary, we encourage firms to use these flexibilities these allow to broaden access for consumers.
Loan-to-income flow limit
Following the Financial Policy Committee’s Recommendation[6] to amend the implementation of its LTI flow limit, any firm looking to increase their high-LTI lending beyond the current threshold can engage with their regulator.
PRA-authorised firms have the option of applying to the PRA[7] for a modification-by-consent, while FCA-authorised mortgage lenders can contact us[8] to discuss the possibility of individual Guidance
These measures will be in place until the PRA and FCA update their rules and Guidance respectively, following a public consultation, or further notice.
Speech: Mortgage reform: supporting home ownership in the UK
In his speech in May 2025[9], director of retail banking, Emad Aladhal, called on lenders to use the flexibility in FCA rules to help more borrowers access affordable mortgages, continue efforts to support first-time buyers and innovate to support the creation of products that meet different consumer needs.
Speech: Building the mortgage market of tomorrow
In his November 2025 speech[10], Nikhil Rathi, FCA chief executive, set out that we are working to build a mortgage market that supports the financial wellbeing of consumers through their lives and makes sustainable homeownership more accessible.
To achieve this, system-wide collaboration between regulators, industry and government is needed.
Feedback Statement and Roadmap
Our Feedback Statement[11] sets out our response to the Discussion Paper.
In it, we set out the areas for action we are prioritising in the form of a Roadmap. These are grouped under 4 themes, which are:
- Expanding access for first-time buyers and underserved consumers.
- Enhancing later life lending.
- Enabling innovation.
- Protecting vulnerable consumers.
Policy development on all themes will commence by the end of 2026 continuing through 2027 as required.
Supporting first-time buyers and underserved consumers
We're consulting on 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.
Next steps
Taken together, our ongoing work aims to give firms the flexibility they need to provide greater access and choice to consumers in the mortgage market at different stages of their lives.
Reforms to conduct regulation will only ever be one part of the solution. It will take a collective effort by stakeholders to tackle the challenges facing the UK housing market.
