FCA is pleased that the number of borrowers who could save money by switching mortgages is now around 370,000, down from 800,000 in 2016. However, it urges borrowers to consider their mortgages, given the rising costs of living, and urges lenders and intermediaries to support customers to do this.
Its most recent analysis shows that 74% of mortgages in the second half of 2021 were on fixed rates, typically between 205 years, and that of those on variable rates, around half were on discounted variable or tracker rates and half on reversion rates.
FCA will continue to track the number of borrowers not switching when it would save them money to do so and engage with industry to encourage switching awareness. It will also consider the impact on consumers of increased costs where cheaper legacy deals are replaced with more expensive ones as interest rates rise.
While FCA is aware that it is not in some borrowers’ interests to switch, it also focuses on those who cannot and highlights its recent Dear CEO letter to firms setting out FCA’s expectations of them when they support borrowers who are behind on their payments. While there are some issues, including also the difficulties some borrowers face when their lender has no new deals, FCA does not see any current justification for further regulatory intervention.