Lynda Blackwell, policy manager at the FSA, told MBE Manchester delegates yesterday that the transitional rules had been the “sticky part” of the final Mortgage Market Review paper.
She admitted that the regulator is considering rewriting the rules that currently propose to allow lenders to “switch off new affordability requirements” for paying borrowers looking to transfer onto a mortgage for the same amount or less.
She said the FSA is now considering allowing this to cover transfers to larger mortgages as well.
She said: “We’ve had lots of really very helpful suggestions on this. There is a concern that we may have been too restrictive in not allowing borrowers to borrow more or to increase their payments.
“We need to think about this. There are times when for example changing to a fixed rate mortgage to ensure a greater degree of certainty and that means an increase in monthly repayments, it may actually be in the borrower’s interests to do that.”
