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FCA Proposes Changes to Help More People Access Mortgages
WHY THIS MATTERS: The mortgage landscape is undergoing a necessary evolution as the definition of the ‘typical borrower’ fragments in an increasingly gig-based and dynamic economy. For too long, rigid affordability criteria have acted as a blunt instrument, locking out creditworthy individuals—from the self-employed to those with non-traditional income streams—simply because they do not fit legacy risk models. This move by the Financial Conduct Authority (FCA) is a crucial regulatory signal that policy must evolve to match modern financial realities, not just historical patterns. By prioritizing individual borrower circumstances over automated, exclusionary criteria, regulators are essentially greenlighting a more inclusive approach to homeownership. This isn’t just about administrative easing; it’s a strategic push to modernize consumer access and force lenders to innovate their risk assessment engines, likely paving the way for more sophisticated, data-driven lending products in the near future.
First-time buyers, older borrowers and the self-employed could find it easier to get a mortgage, as the Financial Conduct Authority (FCA) sets out next steps to help reform the market.
Its proposed mortgage rule changes would give lenders more flexibility to consider individual circumstances and develop products that better meet people’s needs – while maintaining strong consumer protections.
They include:
- Reducing barriers for lenders to offer flexible repayments for people with variable income, like the self-employed, and lend to those paid in foreign currency.
- Encouraging lenders to assess affordability based on a person’s full and current situation, rather than automatically excluding people because of minor or past credit history issues.
- Making it easier for older homeowners to unlock wealth built up in their property by updating affordability guidance for retirement interest-only mortgages.
- Updating rules on interest-only (or part interest-only) mortgages to give lenders more flexibility, while ensuring most borrowers have a clear plan to repay (unless they’re
borrowing a smaller amount).
David Geale, executive director for payments and digital finance at the FCA, said: “We’re living longer and how many people work has changed. Our mortgage rules need to keep pace so those who can afford to repay can borrow. Stronger protections mean we can now safely widen access to mortgage borrowing for those that may be underserved.”
The proposals are part of the FCA’s ongoing work to help consumers navigate their financial lives and support growth. In December 2025 it set out its plans to drive reforms to the mortgage market to better meet the needs of consumers today.
The FCA has raised standards across the mortgage market over time, including through the Consumer Duty. The proposals build on that foundation – rebalancing risk to help more people access mortgages while keeping appropriate safeguards in place, including supporting consumers in understanding their options.
As part of gathering feedback on the proposals, the FCA is using an online tool to hear directly from consumers about their experiences of the mortgage market. Alongside feedback from firms and others, this will help make sure consumers’ voices help shape the FCA’s approach.
The FCA is encouraging consumers, firms and all interested parties to respond to the consultation and share their views by 28 July 2026.
FF NEWS TAKE: This regulatory pivot is a decisive step toward closing the gap between outdated mortgage structures and the modern workforce. While this certainly moves the needle by forcing lenders to adopt a more nuanced view of affordability, the true impact depends on execution. We should watch for how lenders balance this newfound flexibility with the need to maintain rigorous, data-backed risk assessments. If implemented effectively, this could significantly widen the mortgage market’s funnel, forcing a competitive scramble to capture previously underserved demographics
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