Last reviewed: 30 June 2026
TL;DR: The FCA is consulting on changes to give mortgage lenders more flexibility to assess affordability based on a borrower's full financial picture, aimed at first-time buyers, the self-employed, and older borrowers. The consultation closes 28 July 2026. Core affordability checks remain in place; this is a proposal, not a confirmed rule change yet.
The Financial Conduct Authority (FCA) has set out proposals to give mortgage lenders more flexibility when assessing affordability, in a blog published as part of its ongoing mortgage market reform programme. The regulator is inviting feedback through a consultation open until 28 July 2026.
What the FCA is proposing
The proposals would allow lenders to take a more rounded view of a borrower's finances rather than applying a standard template. The FCA says this could help people with variable incomes, including the self-employed, access mortgages with more flexible repayment structures, and could make it easier for older homeowners to access equity stored in their property.
Lenders would also be encouraged to assess affordability based on a borrower's full and current financial situation, rather than dismissing applicants over minor or historic credit issues, and would have more flexibility to offer interest-only lending where appropriate.
Why the FCA is making this change
The regulator notes that home buying has changed significantly over the past decade: people are living longer, employment patterns have shifted, and monthly income varies more for many borrowers than in the past. The FCA states that 99 percent of mortgages taken out since 2014 are currently on track, and frames the proposals as widening access without removing core protections.
What the FCA acknowledges about the risks
The FCA has been explicit that wider access brings trade-offs. More borrowers with less certain incomes being able to access mortgages increases the risk that some may struggle if they face unemployment or ill health. The regulator argues that the longer-term risk of people being unable to get onto the housing ladder, given that renting is often more expensive and less secure, is currently underpriced against that risk.
Is this a confirmed rule change?
No. This is a consultation, not a finalised rule. The FCA is seeking feedback from lenders, consumer groups and the public through an online tool, with the consultation period running until 28 July 2026. Any rule changes would follow after the consultation closes and responses are reviewed.
KEY FACTS
- FCA proposes more lender flexibility on affordability assessment
- Targeted at first-time buyers, self-employed borrowers and older homeowners
- More flexibility proposed for interest-only lending where suitable
- Consultation open until 28 July 2026; not yet a confirmed rule
- FCA states 99% of mortgages taken out since 2014 remain on track
RELATED GUIDES
This article is for general information only and does not constitute financial or mortgage advice. The proposals discussed are subject to consultation and may change before any rules are finalised. Kael Tripton Ltd is not authorised or regulated by the Financial Conduct Authority. Consult a qualified mortgage adviser before making borrowing decisions.
Frequently asked questions
Has the FCA changed mortgage affordability rules?
No, not yet. The FCA has published proposals and opened a consultation that runs until 28 July 2026. No new rules are in force as a result of this announcement.
Who would the proposed changes help most?
The FCA says the proposals are aimed particularly at first-time buyers, self-employed borrowers with variable income, and older homeowners looking to access equity in their property.
Will core affordability checks be removed?
No. The FCA describes the proposals as giving lenders more flexibility in how they assess a full financial picture, while stating that core affordability requirements remain important to market stability.
How can I respond to the consultation?
The FCA is accepting feedback from consumers and industry through an online tool linked from its published blog, with responses accepted until 28 July 2026.
Sources
FCA, Opening the door to mortgages: rules focused on better outcomes for people
