FCA mortgage changes: Could getting a mortgage become easier?

If you’ve struggled to get a mortgage because you’re self employed, have an irregular income, are older, or have had credit issues in the past, the Financial Conduct Authority (FCA) is proposing changes that could make borrowing more flexible in the future.

The regulator has unveiled plans designed to help more people access mortgages by giving lenders greater freedom to assess applications based on individual circumstances, rather than relying on rigid criteria. The proposals form part of the FCA’s wider review of mortgage lending rules and are intended to reflect how people live and work today.

What’s changing?

The FCA isn’t proposing a return to the loose lending practices seen before the 2008 financial crisis. Instead, it wants lenders to have more flexibility when assessing borrowers while still maintaining strong consumer protections.

The proposed changes could make it easier for lenders to:

• Consider applicants with fluctuating incomes, including self employed workers, freelancers and contractors.
• Assess borrowers with minor or historic credit issues based on their current financial circumstances.
• Offer more flexible repayment arrangements.
• Lend to people paid in foreign currencies.
• Support older borrowers and those seeking later life lending options.

If you’ve ever been told that your income is too unpredictable, your credit history isn’t perfect, or your age makes borrowing more difficult, these proposals could eventually widen your options.

Why is the FCA making these changes?

The way people earn money has changed significantly over the past decade. More people work for themselves, take on contract work, earn income from multiple sources or continue working later in life. However, mortgage rules and lending practices haven’t always kept pace with these changes.

The FCA says some borrowers are currently underserved by the mortgage market because lenders can be discouraged from offering products that accommodate different financial situations. The regulator believes its proposals could help lenders develop products that better reflect modern working patterns and household finances.

Could mortgage repayments become more flexible?

Potentially, yes. One area under discussion is whether borrowers with irregular incomes could benefit from alternative repayment schedules. Instead of making the same payment every month, future mortgage products could potentially allow repayment structures that better align with fluctuating earnings.

If you’re self employed, for example, you might have periods where income is higher and others where it’s lower. The FCA is exploring whether current rules create unnecessary barriers to this type of flexibility.

What could this mean for first-time buyers?

If you’re trying to get onto the property ladder, the proposals could make a difference.

The FCA wants lenders to look more closely at a person’s overall financial position, rather than automatically excluding applicants because of historic financial difficulties or non-standard income patterns. First-time buyers are among the groups that could benefit if lenders become more willing to take a broader view of affordability.

The regulator has also previously encouraged lenders to make use of existing flexibility within affordability and stress-testing rules, which has already led some lenders to increase the amount customers can borrow.

Are the rules changing right now?

The FCA is currently consulting on the proposals and gathering feedback from consumers, lenders and industry groups before deciding whether to introduce the changes. The consultation runs until July 2026.

That means you won’t see immediate changes to mortgage products or lending criteria, but the direction of travel is clear: the regulator wants a mortgage market that works for a wider range of borrowers.

What should you do if you’re struggling to get a mortgage?

If you’ve previously been rejected for a mortgage, it may still be worth speaking to a broker or lender about your options now. Some lenders have already started making use of existing flexibility in affordability assessments, particularly for borrowers with unusual income patterns. Depending on your circumstances, you may have more options than you realise. If the FCA’s proposals go ahead, you could see even more flexibility become available in the years ahead.

For now, the key message is that the regulator recognises that not everyone fits the traditional mortgage mould. If you’ve felt locked out of the market because your circumstances don’t match standard lending criteria, these proposed changes are aimed squarely at people like you.

This article is intended as general information only and should not be considered financial advice. You should seek independent financial advice before making decisions about mortgages or other financial products.

If you have any thoughts on this topic, or any consumer issues you would like us to cover, feel free to get in touch at support@resolver.co.uk.

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