A spokesman for the lender said: “From a broker point of view, almost all the business recieved is on an advised basis so this should not have an impact on the day-to-day stuff they do. This will have more of an impact on anybody that is getting a mortgage through a branch or a telephony channel. Customers will have to be made aware of the criteria.”
In the final Mortgage Market Review consultation paper (CP11/31), the FSA said that lenders should assess affordability on a capital and interest basis, but where a consumer has a credible strategy to repay the capital at the end of the term, affordability may be assessed on an interest-only basis.
In this instance, the lender will need to obtain information on the actual cost of the repayment strategy and not an estimated cost.
In the same paper, the regulator also proposed to ban non-advised mortgage sales. It said that firms will be required to assess product suitability and offer advice in all circumstances when there is spoken or other “interactive dialogue” between consumers and firms. This includes “face-to-face, telephone, social media or online propositions with the facility for live chats or otherwise.”
The move aims to reduce consumer confusion over when they have and have not received advice.