When the Financial Conduct Authority (FCA) announced its Mortgage Rule Review last year, it marked more than just another regulatory update.
It opened the door to what could be a major shift in how the UK mortgage market works.
For over a decade, affordability checks have been shaped by the lessons of 2008. The result has been a system that prioritises caution, but potentially at the expense of flexibility. The FCA’s proposals aim to rebalance that equation, potentially easing barriers for borrowers while keeping the protections that underpin financial stability.
Handled well, the reforms could make the market fairer, more open, and more reflective of how people’s financial lives really work today.
Opening doors for borrowers and brokers
One of the most significant areas under review is how lenders assess affordability for borrowers reaching the end of their mortgage deals.
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The FCA is exploring whether a lighter-touch approach – similar to the process used for product transfers – could apply in cases where switching to a new lender would be more affordable than sticking with an existing one.
For many homeowners, that could remove one of the key barriers to securing a better rate. Life changes such as shifts in income, employment or family circumstances can make it less appealing for some borrowers to remortgage, as affordability checks can influence the outcome and add a layer of complexity. A more flexible framework, similar to that of the product transfer system, could help those borrowers access a wider range of deals without the same level of red tape.
For brokers, this could reshape the advice process. A simplified affordability assessment might reduce some of the paperwork, but it raises new questions about guidance and responsibility. Brokers will still play a vital role in helping clients understand all their options and in making sure that simplicity doesn’t come at the cost of suitability.
As the FCA also revisits the role of interest-only and part-and-part mortgages, flexibility is again the focus. Used responsibly, these products can give borrowers more control over their finances, whether they’re managing fluctuating incomes, planning for retirement, or bridging between life stages. With the right advice, these options can support long-term financial planning, not just short-term relief.
The bigger picture
Of course, regulation alone can’t fix everything. Easing affordability criteria may help some borrowers, but it won’t solve the deeper issue of housing supply. Without more homes being built, demand will continue to outstrip supply and that pressure risks driving up prices, no matter how accessible lending becomes.
That’s why this review should be seen as one part of a wider picture. To build a mortgage market that truly supports homeownership, regulators, lenders and policymakers all need to align. Product innovation, fair regulation and a steady increase in housing supply must all work together.
The FCA’s review is a chance to bring those strands closer and to shape a system that reflects the realities faced by both today’s borrowers and the lenders who serve them.
Brokers remain the constant
Amid any regulatory change, one constant will remain through all of it – the vital role of brokers. As affordability assessments, product types and lending rules evolve, borrowers will continue to rely on the expertise of brokers to make sense of it all. From product transfers and remortgages to first-time purchases and later life lending, brokers’ expertise will be even more valuable in helping to give clients the confidence to make informed, sustainable decisions.
If the FCA’s reforms lead to a more flexible market, that guidance will become even more essential. Brokers are central to ensuring that greater access doesn’t come at the expense of understanding, helping clients not only find a mortgage, but find the right one for their circumstances.
Striking the right balance
The Mortgage Rule Review is a timely opportunity to reflect on how far the market has come since 2008 and where it should go next. The challenge now is striking the right balance between flexibility and fairness, ensuring that the right systems are put in place to protect borrowers, while giving them the confidence and freedom to support their long-term goals.
That won’t happen overnight, but with collaboration between regulators, lenders and intermediaries, it’s within reach. With the right mix of caution and creativity, the industry can build a mortgage market that doesn’t just protect borrowers but empowers them.
