FSE: FCA: Affordability not needed on switches
The regulator that any such checks were not part of the MMR and at a lenders own discretion.
Lynda Blackwell of the FCA said: “Affordability is not needed on product switches. As long as there isn’t any additional borrowing it just isn’t required.”
Some lenders have been implementing such checks for homeowners looking to switch and the regulator said it was disappointed to hear about the practice.
Blackwell said: “This is not part of the MMR. It’s disappointing to hear that this is happening and we hope lenders will rectify this going forward.”
Blackwell also said she believed some lenders may look to circumvent MMR but going into more profitable areas such as bridging.
She said: “MMR could see an increase in lenders looking to circumvent the requirements set out in rules.
“This could mean developing credit impaired products or entering more profitable sectors such as bridging.”