The FCA has outlined a series of reforms aimed at reshaping the mortgage market, with a particular focus on first-time buyers, underserved consumers and later-life borrowers.
The regulator said the proposals are designed to widen access to affordable mortgages, better reflect modern working patterns and help homeowners make more effective use of property wealth across their lifetime.
Under the plans, the FCA will prioritise changes that support people who currently struggle to access traditional mortgage products, including the self-employed and those with variable or non-standard incomes. The regulator believes simplifying existing mortgage rules could allow lenders to offer more flexible products that better align with income volatility at different stages of life, while still maintaining robust consumer protections.
Later-life lending forms a second pillar of the FCA’s agenda. The regulator plans to review the requirements around retirement interest-only mortgages to make them more accessible, while also exploring how advice can be improved to help consumers plan more confidently for later life. As part of this work, the FCA will launch a focused market study into the lifetime mortgage sector, assessing whether it is well positioned to meet the evolving needs of future customers and deliver fair value outcomes.
Innovation and disclosure are also central to the regulator’s vision for the mortgage market. The FCA has signalled its intention to encourage the responsible use of data and technology, including AI, to help brokers deliver faster and more effective advice without losing the importance of human judgement. Alongside this, the regulator will examine how advertising and disclosure rules could be simplified so consumers can more easily understand mortgage information online.
Protecting vulnerable consumers remains a core consideration, with the FCA planning to work closely with partners to support individuals affected by financial abuse and those using mortgages to manage or consolidate debt.
FCA executive director for payments and digital finance David Geale said, “We have worked at pace this year to improve outcomes for customers wanting a mortgage. We’ll use insight from consumers and industry to drive further reforms and rebalance risk – helping to widen access to affordable mortgages to meet the needs of consumers today.”
He added, “Reforming the mortgage market can help address the fact that as a society we’re saving too little for later life, yet people have huge wealth tied up in property.”
The FCA expects to begin consulting on proposed rule changes across the four priority areas from early 2026, with the first changes targeted for implementation later that year. Terms of reference for the later-life lending market study will be published in the first quarter of next year.
The announcement builds on recent regulatory action. In March 2025, the FCA reminded firms about flexibility within interest rate stress tests, prompting the industry to widen borrowing options and ease affordability pressures, with many borrowers now able to access around £30,000 more. Despite higher interest rates and living costs, the regulator noted that 99% of mortgages taken out since tighter standards were introduced in 2014 are not in arrears, highlighting the resilience of the market.
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