Looking to Remortgage? Changes you may need to know about.

By John Cossons, Mortgage and Protection Designer.

The UK mortgage landscape is evolving with a focus on affordability and responsible lending. The Financial Conduct Authority (FCA) is reviewing and potentially simplifying rules, particularly around affordability assessments when reducing a mortgage term according to a recent policy paper. This includes a move away from prescriptive full affordability assessments towards more tailored and risk-sensitive approaches, especially for remortgages on similar terms. While some changes aim to ease the process for borrowers, particularly those looking to reduce their mortgage term, the core principle of responsible lending remains.

Here’s a breakdown of the key changes and considerations:

Affordability Assessments

• Reduced Scrutiny for Term Reductions:

The FCA is proposing to remove the requirement for a full affordability assessment when customers shorten their mortgage term. This is intended to encourage more borrowers to opt for shorter terms and potentially reduce their overall interest costs.

• Tailored Approach:

Lenders will have more flexibility in determining the appropriate level of affordability assessment based on the specific circumstances of the borrower and the proposed changes to the mortgage.

• Responsible Lending:

Despite the changes, lenders will still need to ensure they are lending responsibly and that borrowers can afford the repayments, aligning with the Consumer Duty.

Impact on Borrowers

• Easier Remortgaging:

Streamlined affordability assessments could make it simpler for homeowners to switch to a better mortgage deal with a different lender, potentially saving them money.

• Potential for Larger Loans:

Removing some of the restrictions on affordability assessments might allow some borrowers to borrow more, particularly if they are switching to a new deal with their existing lender.

• Balancing Affordability and Risk:

While changes may make it easier to get a mortgage, it’s crucial to remember that affordability remains a key concern. Borrowers should carefully consider their ability to repay the mortgage over the full term, especially in a fluctuating economic climate.

How Anstee & Co, can help you when you Remortgage.

We are a firm of independent mortgage brokers. This means that the advice we offer is unbiased. We look at all the financial options available to you to recommend the best mortgage for you. Current mortgage rates can be seen on our website. These rates are updated daily. It is worth remembering that the lowest interest rate is not always the best overall deal for your circumstances.

Why not contact us today. The initial meeting is free and without obligation so why not find out how we can help you.

Meetings can be arranged at a time and place that is convenient for you. This may be face-to-face or by video conferencing, such as –

• Zoom
• Microsoft Teams

Telephone meetings may also be arranged. Whatever is best for you. There is no need to visit an office as all work can be handled remotely.

Our Head Office is located at-

• Kettering, Northamptonshire

Our mortgage advisers live and make use of meeting rooms in:

• Bedford, Bedfordshire
• Market Harborough, Leicestershire
• Northampton, Wellingborough and Thrapston in Northamptonshire

If you have any thoughts or views about this article, “Looking to Remortgage? Changes you may need to know about.”, then please let us know.

The information contained in this article is for information purposes only and does not constitute advice. No action should be taken based on this information alone. Anstee & Co is authorised and regulated by the Financial Conduct Authority (FCA).

AS A MORTGAGE IS SECURED AGAINST YOUR HOME, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.