The Financial Conduct Authority (FCA) has outlined proposals designed to streamline the mortgage modification process for homeowners.
The City regulator hopes the changes will make it easier, faster, and cheaper for borrowers to make informed decisions about their mortgages.
The FCA has launched a consultation paper, inviting feedback on potential ways to simplify responsible lending and advice rules for mortgages. The consultation period is open until June 4.
The FCA’s consultation document said: “We want to make it easier, faster and cheaper for consumers to: speak to a mortgage provider about their mortgage needs; reduce their mortgage term, and; remortgage with a new lender.”
Under the proposals, some homeowners could find it easier to lower the total cost of their borrowing by reducing their mortgage term. This could also reduce the risk of repaying a mortgage into later life, when some people may be looking to retire.
We've set out proposals to make it easier, faster and cheaper to make changes to your mortgage, to help support homeowners and growth of the UK economy.https://t.co/Rfh94xgUrQ#FinancialServices #FinancialRegulation #Mortages #EconomicGrowth #FCAGrowth
— Financial Conduct Authority (@TheFCA) May 7, 2025
The consultation document said: “We propose to remove the requirement for a full affordability assessment when reducing the term of a mortgage.
“This would make it easier for consumers to reduce the term of their mortgage, where it is appropriate for them.
“This would, among other positive effects, reduce the risk of borrowers being unable to meet contractual repayments later in life, where lifestyle changes are likely.”
It could also become quicker and easier for mortgage holders to discuss their options with a firm, while still having access to advice if they want or need it.
The moves could help people to access cheaper deals more easily.
The regulator said it would evaluate the success of the proposed changes through its supervision of firms and monitoring regulatory returns, including complaints data.
It has already reminded firms of flexibility in its rules to help people access a mortgage – and in recent weeks, some lenders have announced changes to their affordability assessments, making it easier for some people to access mortgage finance.
Toughened mortgage rules were introduced following the 2008 financial downturn to help make sure people are able to repay what they owe and ensure support for those in financial difficulty.
In 2023, the FCA introduced the Consumer Duty, setting a higher standard for consumer protection across retail financial services. The Duty has a strong focus on firms needing to ensure good outcomes for consumers.
In June 2025, the regulator will launch a public discussion on the future of the mortgage market to consider what the market needs to deliver for people at different stages in their lives and for the wider UK economy.
Emad Aladhal, director of retail banking at the FCA, said: “Our strategy aims to deepen trust and rebalance risk to support growth and improve lives.
“That’s why, with the Consumer Duty now in place to maintain high standards, we want to make it easier, faster and cheaper for borrowers to access and make changes to their mortgage.”
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