The regulator acknowledged that the work which originated its changes was conducted on the first charge sector for its Mortgages Market Study (MMS).
However, in its CP19/17 consultation paper published today, the regulator said these changes would also map across for second charge loans.
“The proposals in this CP also apply to second charge mortgages, though they may be less relevant as these mortgages are frequently used for debt consolidation where advice is required,” the FCA said.
It follows findings in the MMS that consumers maybe being channelled “unnecessarily into advice”, but that any harm from this “does not appear to be large”.
It found that 30 per cent of cases it sampled could have received a cheaper equally suitable product than the one which was recommended.