FCA Proposes Mortgage Rule Reforms to Widen Borrower Access (June 2026)

On 9 June 2026, the Financial Conduct Authority (FCA) published a consultation proposing wide-ranging reforms to UK mortgage rules. The headline aim is simple: make it easier for people who can clearly afford to repay a mortgage to actually get one — particularly groups the regulator says are currently underserved.

The proposals would give lenders more discretion in how they assess individual circumstances and structure products, without removing the core consumer protections introduced after the 2008 financial crisis and reinforced by the FCA's Consumer Duty.

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 consultation paper sets out several specific measures. The most important ones for everyday borrowers are:

• Variable & foreign-currency income: Reducing restrictions on flexible repayment arrangements for borrowers whose income fluctuates or is paid in a foreign currency.
• Smarter affordability assessments: Encouraging lenders to look at a borrower's current full financial picture, rather than penalising minor or historical credit issues that don't reflect today's reality.
• Older homeowners: Updated guidance on retirement interest-only (RIO) mortgages, making it easier for older homeowners to draw on the equity built up in their property.
• Interest-only flexibility: Revised rules on interest-only and part interest-only mortgages, giving lenders more flexibility while still requiring a credible repayment plan for most borrowers.

The FCA is also gathering consumer views via an online tool, so real borrower experiences feed into the final rules.

Three groups in particular are likely to see a meaningful difference if the rules are confirmed:

• The self-employed, contractors and freelancers — historically squeezed by rigid affordability models that struggle with year-on-year income variation. See our self-employed mortgage guide.
• Older homeowners — especially those wanting to remortgage into later life or unlock equity without selling. Compare our guides on later life mortgages and equity release.
• Borrowers with minor or historical credit blips — a single missed payment from years ago should no longer carry as much weight. See bad credit mortgages and how to improve your credit score.

Richard Pinch, head of banking and credit advisory at consultancy Broadstone, called the proposals "a sensible evolution of the mortgage market, recognising that traditional affordability assessments do not always reflect the realities of modern working patterns, income streams and borrowing needs."

It's worth being clear: the FCA is not proposing to scrap the safeguards introduced after the financial crisis. The rules brought in by the Mortgage Market Review and reinforced by the Consumer Duty are staying.

What's changing is how those rules are applied. Instead of one-size-fits-all stress tests that don't fit a 60-year-old contractor or a couple with strong savings and a small old default, lenders will have more room to make sensible, evidence-based decisions.

For borrowers, that should mean fewer automatic declines for situations that are genuinely affordable — and fewer cases where you're pushed onto a more expensive specialist deal when a high street rate would do.

The consultation runs until 28 July 2026, with final rules expected later in 2026 or early 2027. In the meantime:

• If you were declined more than 6–12 months ago, lender criteria and your own circumstances may already have moved. It's worth a fresh look — don't assume a previous "no" is still a "no".
• If you're self-employed or have variable income, some lenders already take a more flexible view than others. A whole-of-market broker can match you to the right one today, and revisit if the FCA rules change.
• If you're an older borrower, RIO and later-life lending is already a fast-moving area — get advice before assuming you're "too old" for a mainstream mortgage.
• If you have minor historical credit issues, run a free credit check first so you know exactly what lenders will see.
• Use our free mortgage and affordability calculators to get a realistic starting figure, then compare today's best mortgage rates.

Whether you're a first-time buyer, home mover, remortgaging, self-employed, or simply unsure whether you'll qualify under existing rules, we're here to help.

The Mortgage Genie is a directly authorised, fee-free mortgage and protection brokerage with access to 90+ UK lenders. We'll explain what the FCA proposals could mean for your situation and find you the right deal under today's rules — without charging you a penny in advice fees.

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