Regulatory Alerts2020-07-24
Added · Updated
PS20/11: Removing barriers to intra-group switching and helping borrowers with maturing interest-only and part-and-part mortgages
The Financial Conduct Authority amends responsible lending rules to allow lenders to opt out of standard or modified affordability assessments when borrowers in closed books switch to a new deal within the same financial group without borrowing more. This enabling rule comes into force immediately on 23 October 2020. Additionally, the Authority issues temporary guidance requiring firms to allow eligible borrowers with maturing interest-only or part-and-part mortgages to delay capital repayment until 31 October 2021, provided they remain up-to-date with interest payments. This guidance applies to loans maturing between 20 March 2020 and 31 October 2021, excludes bridging loans, and permits firms to charge the interest rate applicable under the existing contract.