FCA implements Mortgage Charter rules

FCA has published a policy statement setting out changes to the MCOB sourcebook to support the implementation of the Government’s Mortgage Charter.

The rule changes take effect immediately from 30 June, and enable firms to allow mortgage borrowers to:

  • Reduce their capital repayments (including to zero, and paying interest only) for up to 6 months; and
  • Fully or partly reverse a term extension within 6 months of extending the term.

Under the new rules, both options may be offered without a new affordability assessment.

FCA intends to review the impact of the changes within 12 months.

Laura Wiles