New mortgage rules to ease access for diverse borrowers

The Financial Conduct Authority (FCA) has proposed significant changes to mortgage rules, aiming to provide lenders with greater flexibility in assessing individual circumstances.

These reforms are designed to ease access for diverse borrower groups, including first-time buyers, older individuals, and the self-employed.

A core proposal focuses on reducing barriers for lenders to offer more adaptable repayment solutions, particularly for those with variable income streams, such as self-employed individuals.

This also extends to facilitating mortgage applications for borrowers paid in foreign currencies, acknowledging the evolving global nature of employment.

Furthermore, the FCA encourages a more holistic approach to affordability assessments.

Lenders would be prompted to evaluate a person's full and current financial situation, moving beyond automatic exclusions based on minor or past credit history issues.

This ensures that lending decisions accurately reflect a borrower's present capacity to repay, fostering a more inclusive market while maintaining robust consumer safeguards.

These measures align with the FCA's broader strategy to support consumers and market growth.

David Geale, executive director for payments and digital finance at the FCA, emphasized the need for updated mortgage rules to keep pace with changing demographics and work patterns.

He stated: 'Stronger protections mean we can now safely widen access to mortgage borrowing for those that may be underserved.'

These proposals are integral to the FCA's ongoing efforts to assist consumers in their financial lives and foster market growth.

They build upon plans set out in December 2025 to reform the mortgage market and leverage the foundation of the Consumer Duty.

The aim is to rebalance risk, facilitating broader access to mortgages while ensuring appropriate safeguards remain in place and consumers understand their options.