FCA consults on steps to simplify mortgage rules: "This could be very dangerous"

This is quite a worrying paper for the broker community as well as consumers. All the hard work about pointing people to take advice and understand their commitment and actions can easily all be undone by the click of a tick box button. This is potentialy taking advantage of time poor people who could make a bad, and costly, decision. The public are very cost conscious and will be rate driven without thinking of the implications or reading what they are doing fully. This could be very dangerous.

This could be a risk for both brokers and borrowers. Making mortgage changes “easier” sounds great, but if it leads to advice being bypassed, we’re opening the door to bad decisions. People have busy lives, are under financial pressure and often focus on rates, so giving them more DIY options without proper guidance could backfire.

This sort of thing sounds good on paper, but is much more troublesome in reality. Easier, faster and cheaper mortgage advice sounds great, but that shouldn't come at the expense of quality advice from experts in the field. The risk is that people will use this service because it's convenient, rather than take the time to use the services of a broker with a wealth of experience that could help them get a better deal. The last thing the industry needs is consumers getting bad advice, going in over their heads, which will ultimately hurt the mortgage market.

At long last—common sense is getting a seat at the mortgage table. The regulator’s push to make it easier, faster and cheaper for borrowers to tweak their mortgage is a win for homeowners and the market alike. Cutting red tape, enabling quicker conversations and encouraging smarter borrowing decisions — especially as we help clients tackle affordability, rising costs and longer working lives — is overdue, and together with the relaxation of mortgage stress testing, it signals a clear shift by the regulator. The era of rigid mortgage processes may finally be loosening up. However, the proof will be in how mortgage lenders apply the FCA's guidance without increasing the risk consumers by-pass important financial advice, and that is yet to be seen.

Relaxing the regulation around mortgages may cause some complacency with lenders who see it as an opportunity to bypass brokers, using some form of light-touch regulatory framework for what is normally the most important and expensive purchase anyone is likely to make. Combined with an AI model of underwriting and delivery, there is a lot of exciting change on the horizon, but many will still want to discuss their options with an experienced broker, to take the burden of responsibility off them, too.