The purpose of the directive is to “harmonise” mortgage regulation throughout EU member states. A lot of the new rules mirror those being brought in under the Mortgage Market Review, which will be introduced next April, especially around lenders’ obligation to ensure affordability.
Building Societies Association head of mortgage policy Paul Broadhead says the next phase for the UK is for the Treasury, the FCA and the industry to come to an interpretation of the laws and implement them, following the vote. He says: “There will be lots of discussions there about how everyone [the Treasury, FCA and other UK stakeholders] interprets the directive but we have been working together as a group for so long we pretty much all know what we need to do. Now it is making sure we get to a good outcome for UK consumers.”
The UK has also secured four crucial opt-outs to ensure lenders will be able to continue to offer guarantor mortgages, shared equity loans, offset mortgages and endowments. Conservative MEP Vicky Ford says: “I do not believe we ever needed European law on mortgages. However, we have managed to get rid of the worst bits.”
Enable’s experienced IFA’s always try to make sure the borrower understands their mortgage as fully as possible, and are properly risk assessed.
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