Mortgage rule changes could help more self-employed and older borrowers

The self-employed, older borrowers, first-time buyers, and workers paid in a foreign currency are among those who could benefit from a relaxation in mortgage lending rules.

The regulator, the Financial Conduct Authority, has published a consultation into its proposed mortgage rule changes . The reforms, if introduced, would give lenders greater flexibility when lending to specific groups.

It could help many more borrowers secure a mortgage, where previously they have struggled, or been locked out of the market, due to rigid lending criteria.

Mortgage advisers report that borrowing can be difficult for those with a non-standard profile or income. This can include workers with an irregular income, older borrowers, and those with slightly impaired credit (even where this dates back many years).

Under the proposed changes lenders would have greater flexibility when assessing the individual circumstances of borrowers. A lender would be able to consider a borrower’s ‘full and current’ financial picture. This would give greater flexibility over sticking to rigid rules around income, affordability and credit score.

Lenders could also develop products that better meet borrowers’ needs. This could include offering flexible repayments for example, while still providing robust protection for borrowers to ensure a loan is affordable.

Other key proposals include:

• Relaxing the rules for older homeowners when unlocking wealth built up in their property. The Financial Conduct Authority intends to update its affordability guidance for retirement interest-only mortgages.
• Updating the rules on interest-only (or part interest-only) mortgages to give lenders more flexibility. Borrowers will still need to show a clear repayment plan, as the amount borrowed doesn’t decrease but remains the same with an interest-only loan.

The mortgage rule changes form part of the Financial Conduct Authority’s commitment to help consumers better navigate their financial lives and support the government’s growth agenda.

The regulator is calling on consumers to give their feedback on experiences in the mortgage market, via an online tool on its website. It has also asked for responses from lenders and other financial firms in the market.

The deadline for responses to the consultation is 28 July 2026.

For many people, buying a property is the biggest financial commitment they will make. Finding a mortgage can be stressful, so having trusted support through the process can make a difference.

Your home may be repossessed if you do not keep up repayments on your mortgage.

SJP Approved 09/06/2026