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Telegraph request: FCA's proposals on mortgage products

ended 09. June 2026

Telegraph request: 

I hope you're well. I'm looking into the FCA's proposals on mortgage products today and specifically how it would benefit older borrowers. 

I've included a couple of snippets from the proposals below. 

  • Does a lack of viable mortgage products prevent pensioners from downsizing? 
  • People often cite stamp duty as stalling the market but is this also preventing transactions?
  • Is the assumption that pensioners have large equity misplaced for Gen X borrowers (as opposed to baby boomers) and therefore they need access to a range of mortgage products?

It would be really useful to hear if you think this is a significant problem in the housing market. 

CURRENT GUIDANCE: When assessing affordability of a retirement interest-only mortgage with joint borrowers, firms should consider the ability of a single borrower to continue making the required payments if the other borrower dies. Firms can take into account relevant evidence such as pensions payable to the surviving spouse or civil partner.

PROPOSAL: We propose to remove this guidance which would mean affordability for joint retirement interest-only mortgage applications are assessed in the same way as for standard joint mortgages i.e. firms would not be obliged to always consider a sole borrower’s ability to afford the mortgage if the joint borrower passes away. 

Responses asap

 

7 responses from the Newspage community

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Editor
Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
Older borrowers are often treated as if they are all sitting on vast, mortgage free housing wealth, but that picture is increasingly out of date. Many Gen X borrowers will enter later life with higher debt, less generous pensions and less housing equity than the baby boomers before them. If the mortgage market does not change, downsizing becomes harder, not easier. Stamp duty is a major blockage, but so is a lack of sensible, flexible lending for people who may have income and equity but do not fit a neat tick in a box model. The FCA’s proposal could help by removing a cautious rule that makes joint retirement interest-only mortgages harder to access. Lenders still need to behave responsibly, but assuming every application must work on one income can shut perfectly viable borrowers out of the market and freeze up housing chains.
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Harry Goodliffe
Director at HTG Mortgages
There's a growing gap between how lenders assess older borrowers and how many older borrowers actually live. Loads of people approaching retirement still have mortgages, are supporting a family, or need borrowing to help with a move. The assumption that all pensioners have substantial equity and no need for credit is becoming hugely outdated. If these proposals help more people access appropriate mortgage products later in life, they could remove one of the less visible barriers holding back housing transactions.
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Martin Rayner
Financial Adviser at Compton Financial Services
I do not think a lack of mortgage products is a major barrier to downsizing. By its very nature, downsizing releases equity, so many borrowers can either buy outright or port their existing mortgage to a cheaper property.

The bigger issue is for borrowers who want to stay in their home. We regularly see people reach retirement, come to the end of a mortgage deal and discover their remortgage options are far more limited than they expected.

In some cases, borrowers who have managed their mortgage perfectly for years suddenly find they no longer fit standard lending criteria because of how retirement income is assessed. That can leave people feeling forced to move at exactly the point in life when they want less stress and greater stability.

The real benefit of greater flexibility in later-life lending is not encouraging downsizing. It is giving responsible borrowers more choice and helping them remain in the homes and communities they already know.
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Richard Davidson
Mortgage Advisor at onlinemortgageadvisor.co.uk
There is a real risk people picture every older borrower as a baby boomer sitting on a mountain of housing wealth, but that is rarely what I see. Today's retirees were teenagers in the age of punk rock and Ziggy Stardust and in their fifties during the credit crisis, and a lot of them are in far tighter spots than the stereotype suggests, with growing numbers in their late fifties asking me about mortgages that run well into retirement.

These proposals would genuinely help. Lending into later life currently leans on a survivorship basis, and now that gold plated final salary pensions are becoming rarer with each generation, that test makes borrowing harder and harder for people who can comfortably afford it. Removing it would let me get more of these clients the products they actually need.
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Nouran Moustafa
Practice Principal & IFA at Roxton Wealth
Yes, this is a real problem. People keep blaming stamp duty for older homeowners staying put, but mortgage product design is part of the blockage too. If someone wants to downsize but still needs a small mortgage, the market can make that harder than it should be.

The assumption that every older borrower is sitting on huge equity is lazy. It may have been truer for some baby boomers, but Gen X is different. Many still have mortgages, divorce settlements, later-life borrowing, adult children to support, care costs or pension gaps.

The current approach to joint retirement interest-only affordability can also be restrictive. Protecting borrowers matters, but blunt rules can trap people in homes that no longer suit them.

A better later-life mortgage market would help people move, release family homes and keep the housing chain flowing. This is not reckless lending to pensioners. It is recognising that retirement today is more complex than “own home outright and live off a pension”.
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Darryl Dhoffer
Founder at The Mortgage Geezer
Critics will warn of a future spike in repossessions for grieving, low-income survivors. But the FCA is completely right to scrap this blunt mandate.
The current rules double stresses the same mortgage, strangling the RIO market into an unusable niche. Furthermore, under modern Consumer Duty rules, lenders are already legally bound to prevent foreseeable harm and deliver good outcomes. They won't suddenly turn reckless; they’ll simply swap a rigid regulatory hammer for hopefully common sense, individual risk assessments.

Forcing an older couple to qualify based purely on a single survivor's post-death pension and completely ignoring wider financial assets, family support, or explicit plans to downsize later was an act of bureaucratic overreach. Scrapping it allows lenders to assess real world finances responsibly while finally giving older borrowers the flexibility they desperately need.
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Peter Dockar
Chief Commercial Officer at Gen H (Generation Home)
Stamp duty is uniquely unsuitable for the modern housing market. It deters first-time buyers and keeps pensioners trapped in homes they no longer need. It is a tax on moving, not on wealth, and restricts liquidity a market which desperately needs it. If a pensioner – who wishes to move out of their 4-bedroom home which a growing family could make great use of – can't cough up the extra several thousand to downsize, they have no option but to stay put. This prevents transactions and keeps housing stock out of the market. The regulator should strongly consider replacing stamp duty with a more effective tax – or no tax at all, given the wider growth benefits. For lenders' part, restrictive affordability assessments and a lack of products can hurt older borrowers, too. Lenders should be considering products like split terms, interest-only, and mortgages for life to enable pensioners to stay or move into a home that is suitable for them.