The FSA is now proposing that the trigger points for when a consumer has to be given a pre-application KFI are when an intermediary gives advice to the consumer to take out one or more products.
A KFI should be provided for each product when a consumer requests a KFI, unless the intermediary is aware that they are unable to offer that product to them or when the consumer has provided the intermediary with details of a product they would like to proceed with under the execution-only sales route.
Intermediaries will also now only need to issue one KFI in place of providing both a KFI with interest-rolled up and interest not rolled up.
These changes are intended to help to minimise information overload on the consumer and the burden on intermediaries, said the FSA.
The KFI was introduced to outline the main features and risks of a mortgage product.
Currently, consumers must receive a KFI each time they get information about a product from an intermediary that is specific to the amount they wish to borrow.
The FSA has since found that consumers did not use the document to make comparisons between products as it was intended.
The regulator proposed in CP10/28 to retain the KFI in its current form as making changes to the format of it would be prohibitive in cost.
These costs would be difficult to justify if a future European directive on mortgage credit required intermediaries to adopt a different document and incur similar costs again.
The EU mortgage directive has stated it intends to implement a similar document to the KFI called the ESIS.
