can access bigger mortgages<\/a>. This followed an intervention by the FCA on the \u201cstress tests\u201d that some lenders were doing to check that people\u2019s repayments would remain affordable even if mortgage rates went up.<\/p>\nIn its new mortgage review, the regulator said there was wide agreement that some potential first-time buyer groups \u201ccould be better served\u201d. This included people who cannot afford a big deposit, are self\u2011employed, are recovering from a \u201cnegative life event\u201d, or had a negative mark on their credit file.<\/p>\n
One idea under discussion involves offering greater payment flexibility to self-employed people, contractors, freelancers and others, which could include \u201calternative payment schedules to help those with irregular income flows\u201d. This could mean that individuals would be allowed to vary the amount they pay each month, or it might be that instead of \u2013 for example \u2013 having to pay \u00a31,000 to their bank every month, they could pay \u00a32,000 every two months.<\/p>\n
Some of the FCA\u2019s rules refer to \u201cmonthly payments\u201d, which may act as a barrier to product innovation, so the regulator said it would review the wording and look at whether it needed to be updated.<\/p>\n
The watchdog is also examining the idea of giving more recognition to a decent record of paying rent when someone applies for a mortgage and is undergoing affordability checks.<\/p>\n
The FCA said: \u201cSome consumers have previously reported frustration where the regular payment a lender considers affordable is less than the rent they currently pay, leading to a smaller overall mortgage offer than expected.\u201d<\/p>\n
Another group who may benefit from the shake-up are those who previously had a negative mark on their credit file, perhaps because of debts they had previously run up, but are now in a better place financially. The regulator said some mortgage lenders may be applying its definition of a \u201ccredit\u2011impaired customer\u201d more broadly than was originally intended, which may be causing some to pull back from lending to people whose adverse credit situation had been resolved.<\/p>\n
Meanwhile, the FCA is also exploring the idea of making interest-only mortgages easier to get hold of. These mortgages were hugely popular but almost became extinct after the 2007-08 financial crisis, with some viewing them as an example of irresponsible lending. However, the FCA has said they could be suitable for some consumers who might struggle to afford a traditional repayment mortgage.<\/p>\n
It added that, looking ahead, more people would be taking out a mortgage that runs beyond state pension age, so it would be exploring what could be done to boost the \u201clater life lending\u201d market, which includes equity release mortgages that older people can take out against their homes.<\/p>\n
Emad Aladhal, the FCA\u2019s retail banking director, said people\u2019s financial lives and needs were changing, and that today\u2019s home ownership affordability challenges \u201cmay be creating problems for the future\u201d.<\/p>\n
He added: \u201cIn a world where pension income is less reliable, housing wealth will be more important to financial wellbeing,\u201d which was why the regulator was keen to widen access to affordable borrowing and help more people own their own home.<\/p>\n
Separately on Monday, Nationwide building society said house prices in the UK could rise by as much as 4% next year<\/a> but getting on the property ladder may become slightly less difficult.<\/p>\n","protected":false},"excerpt":{"rendered":"Freelancers and gig economy workers could enjoy more flexibility over how and when they pay their mortgage under…\n","protected":false},"author":2,"featured_media":317578,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[49,50,51,47,52,48],"class_list":{"0":"post-317577","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-headlines","8":"tag-headlines","9":"tag-news","10":"tag-top-news","11":"tag-top-stories","12":"tag-topnews","13":"tag-topstories"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/317577","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=317577"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/317577\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/317578"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=317577"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=317577"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=317577"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}