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FCA Consults on More Flexible Mortgage Lending Rules
June 9, 2026
The Financial Conduct Authority (FCA) has opened a consultation on changes that could make it easier for more people to get a suitable mortgage.
The proposals are aimed at creditworthy borrowers who don’t always fit neatly within the current rules, including first-time buyers and self-employed people. They could also help older borrowers or those whose income varies from month to month.
Affordability checks will still apply, but lenders could have more freedom to consider each application on its own merits instead of relying on rigid criteria.
A more flexible approach to affordability
The consultation, known as CP26/18, is part of the FCA’s wider Mortgage Rule Review.
The proposals reflect how working patterns and plans for later life have changed. Some people have a reliable income, but part of it may come from overtime or bonuses. Others are self-employed or work on contracts – circumstances that haven’t always fitted neatly within traditional mortgage criteria.
The proposals could give lenders more scope to consider these earnings when assessing affordability. The FCA is also reviewing how past credit problems are treated, which could help borrowers whose circumstances have since improved.
Changes to mortgage products
The consultation covers several types of mortgage.
The FCA is proposing more flexibility around interest-only and part-and-part mortgages. Borrowers would still need a credible plan for repaying the capital but may no longer need to show a repayment plan where the interest-only element is below 25% of the lender’s valuation. Above this level, lenders would ask for more evidence as the interest-only share increases.
The FCA is reviewing retirement interest-only mortgages and later-life lending, so the rules better reflect how people receive income in retirement.
It’s also proposing changes for foreign-currency income and bridging loans. Regulated bridging loans could run for up to 24 months, rather than 12, including any extensions.
Read the consultation page
Affordability checks will remain
The FCA has been clear that the proposals aren’t about removing consumer protection or responsible lending and financing requirements. Lenders would still need to make sure each mortgage is affordable and sustainable, but they’d have more room to support suitable borrowers who don’t fit a standard lending model.
What happens next?
The consultation is open until 28th July 2026.
The FCA will consider the responses before publishing its final position. A policy statement is expected before the end of 2026, along with details of any confirmed rule changes.
For more information, read the consultation paper here
Speak to our mortgage team
Important information
The information on this page is for general guidance only and does not constitute personal financial advice. We recommend seeking advice tailored to your individual circumstances before making financial decisions.