Osborne encourages waiving of affordability checks for good-credit borrowers
George Osborne has encouraged lenders to waive affordability assessments for mortgage prisoners where borrowers are looking to switch products without taking on more debt.
While welcoming the overall findings of the Financial Conduct Authority’s (FCA) Responsible Lending Review, the Chancellor said it was also important that consumers are not prevented from accessing finance that they can afford.
The FCA’s post-Mortgage Market Review report published this week, agreed that the majority of lenders were using transitional arrangements effectively, but that the process could be made more efficient.
In an open letter Osborne wrote: “People seek to make changes to their mortgages for a variety of reasons. In the low interest rate environment of recent years many borrowers have looked to switch products to take advantage of lower rate deals.”
“To facilitate this the FCA allows lenders to waive affordability assessment requirements where an existing customer wants to make a change to their mortgage and is not taking on additional debt.
“I am encouraged by the FCA’s finding that the majority of lenders are making use of this flexibility. I want to emphasise how important I consider this to be.”