In its final Mortgage Market Review paper PS12/16, the regulator said lenders must ensure TCF.
“Under this provision, if the existing lender takes advantage of a ‘trapped’ borrower or treats them any less favourably than other customers with similar characteristics – for example, by offering less favourable interest rates or other terms – then this may be relied on as tending to show contravention of Principle 6 ‘treating customers fairly’.
“We do not believe that it is appropriate to make these transitional arrangements compulsory. Ultimately, it is for lenders to make lending decisions, and there may be sound reasons for not proceeding with individual transactions.”
However, the move has been welcomed by the industry including the Building Societies Association and Mortgage Advice Bureau.
