The Financial Conduct Authority (FCA) has published the next steps for the Mortgage Rule Review, aiming to “enable the mortgage market of the future”.
The regulator will focus on four key areas: first-time buyers and under-served groups, enhancing later life lending, innovation and protecting vulnerable customers.
According to the FCA’s proposed timeline, it will consult on loan-to-income (LTI) limits, responsible lending rules and affordability for retirement interest-only (RIO) mortgages in the first six months of 2026. By the second half of the year, the regulator will publish policy statements and feedback around these three areas.
Work around holistic advice for later life borrowers, innovation and vulnerability will take place in 2027.
The regulator said mortgage affordability was a “significant barrier”, resulting in first-time buyers who were older and borrowing for longer.
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It said more people would be borrowing into retirement and access to later life lending would be key.
The FCA said “now is the right time to consider the trade‑offs in the current market, and consider whether, by rebalancing risk, we can improve outcomes for more consumers. As we do so, we will remain mindful of the lessons learned from the financial crisis and the importance of responsible lending”.
David Geale, executive director for payments and digital finance at the FCA, said: “We have worked at pace this year to improve outcomes for customers wanting a mortgage. We’ll use insight from consumers and industry to drive further reforms and rebalance risk – helping to widen access to affordable mortgages to meet the needs of consumers today.
“Reforming the mortgage market can help address the fact that, as a society, we’re saving too little for later life, yet people have huge wealth tied up in property.”
