PS20/01: Mortgage advice and selling standards: feedback to CP19/17 and final rules

Read PS20/01[2]

The changes outlined in this Policy Statement (PS) are part of a package of remedies arising from the Mortgages Market Study.

These remedies aim to work together to support our objectives to ensure consumers have the information and support they need to make informed choices about how they buy a mortgage.

The Mortgages Market Study (MMS) identified three potential harms relating to our mortgage advice and selling standards: 

• our rules and guidance may be a barrier to developing tools that help consumers choose a mortgage 
• consumers looking to buy an execution-only mortgage (ie without advice) are diverted to advice; execution-only sales channels are not always easy to use 
• many consumers are overpaying for their mortgages, even when they get advice 

To address these harms, we consulted on changes to our mortgage advice and selling standards, in Consultation Paper 19/17[3].

This PS summarises the feedback we received and sets out our final rules. 

The  changes we have made in this PS make it easier for firms to present options to consumers without giving regulated advice. They help firms make execution-only sales channels easier to use.

Similarly, recent changes to our responsible lending rules reduce regulatory barriers and help consumers get a mortgage that is right for them. These two changes complement each other to deliver the outcomes we want to see.  

Who this applies to

This PS will be of interest to:

• consumers
• banks, building societies and credit unions
• mortgage firms
• trade bodies representing those with mortgages
• consumer groups representing those with mortgages

Next steps

The changes to our rules and guidance will come in to force on 31 January 2020.

To allow firms time to adapt their process to accommodate the changes, some of the rules will be subject to transitional provisions until 30 July 2020.