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<p>The EU Mortgage Credit Directive (MCD), which came into force in March 2016, prevents
lenders waiving the affordability requirements when a borrower moves to a new lender.
As a result some borrowers may find it harder to switch to a new lender to access
lower rates.</p><p> </p><p>While we must comply with the MCD, the Financial Conduct
Authority have put in place exemptions which allow lenders to waive affordability
requirements for customers that are remortgaging with their existing lender but not
increasing the size of their debt. In addition in July 2018, UK Finance, the Building
Socieities Association, and the Intermediary Mortgage Lenders Association, announced
a cross industry voluntary agreement. Under this agreement lenders undertook to write
by the end of 2018 to any borrowers on the reversion rate who are up to date with
payments, and have a minimum of 2 years and £10,000 left on their mortgage, to let
them know they can access lower mortgage rates with their existing lender. Officials
in the Treasury continue to work closely with the FCA and industry to explore what
more can be done<strong>. </strong></p>
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