Mortgage rules can make a big difference to your options, especially when you're looking to switch deals or change your mortgage term. The Financial Conduct Authority (FCA) relaxed some of these rules, making it potentially easier to remortgage with a new lender, shorten your term or discuss your options without automatically needing mortgage advice.

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

If you want to read the rules for yourself, you can find the full FCA PS25/11 Mortgage Rule Review on the FCA's website. And if you're thinking about switching deals, our remortgage calculator can help you see how your monthly repayments might change.

But lenders don't have to use these changes. What's actually on offer depends on who you're borrowing from.

This article is for general information only and isn't personal financial advice.

What is PS25/11 and when did it come into force?

The FCA published PS25/11 on 22 July 2025 as the first step of its Mortgage Rule Review.

As the FCA confirmed, "The changes to our rules, which are permissive in nature, will come into force immediately".

But the FCA also warned that firms "will need time to implement them and so we do not expect that consumers will be able to take advantage of the flexibility they provide immediately." The changes were formally introduced through FCA instrument 2025/34, which also came into force on the same day.

The FCA simplified mortgage rules announcement also says, "While these changes are voluntary for firms". So lenders can decide which changes to use and when.

Because these new mortgage rules are FCA rules for regulated mortgages, they apply to lenders and brokers across England, Wales, Scotland and Northern Ireland. 

What did PS25/11 change for mortgage borrowers?

PS25/11 changed four things for borrowers. Some people switching to a new lender may get a lighter affordability check.

Shortening your mortgage term no longer automatically requires a full assessment, and talking to a lender won't automatically trigger mortgage advice. There's also a new rule on how lenders must treat you if your term runs out while you still owe money.

These changes give lenders more flexibility, but it's still up to them whether to use it.

Here's a closer look at what changed under PS25/11, how the rules worked before and what the changes could mean for you, based on the FCA's PS25/11 policy statement.

How does PS25/11 change remortgaging with a new lender?

PS25/11 widened the circumstances in which lenders can use a modified affordability assessment (MAA) when you remortgage without increasing your borrowing, apart from certain fees. This allows lenders to use a different, more limited affordability assessment in qualifying cases, rather than carrying out all the usual checks. It doesn't guarantee you'll be accepted or that the new mortgage will be suitable for your circumstances.

The MAA was introduced in 2019 to help borrowers who were up to date with their payments switch to a cheaper deal (paras 3.42 to 3.44).

Under PS25/11, a new lender can now use the modified affordability assessment if the deal they're offering is cheaper than either your current mortgage or a new deal available from your existing lender. Previously, only your current mortgage was used for this comparison (para 1.18).

Watch out for fees here, because the comparison must include any product or arrangement fee on the new deal (para 4.29). Lenders decide whether to apply the MAA at all, and may still carry out a full affordability assessment instead (para 4.5).

If you're new to remortgaging, our guide explains what a remortgage is and how switching works. You can also use our remortgage calculator to explore your options.

Who can a new lender assess with the modified affordability assessment?

The eligibility conditions didn't change in PS25/11. You usually need an existing mortgage that's up to date, and you can't borrow more apart from fees.

To qualify, you need to meet all four conditions (para 4.29).

• You have a current mortgage
• Your payments are up to date at application and over the previous 12 months
• You aren't borrowing more, other than to pay a product or broker fee
• The switch is on the same property

Even if you meet all of them, there's no guarantee a lender will use the MAA. If your mortgage term runs past retirement, the lender still needs to consider whether your retirement income can cover the payments (4.14).

For more on how age affects your options, see our mortgage age limit guide.

Can you reduce your mortgage term without a full affordability check?

Yes, PS25/11 removed the requirement for a full affordability assessment when you reduce your mortgage term. Your lender still has to consider whether the higher payments are affordable for you.

As the FCA puts it, "We are removing the requirement for a full affordability assessment when reducing the term of a mortgage" (para 1.16).

Before PS25/11, lenders had to assess affordability for changes "likely to be material to affordability." But term reductions weren't specifically on that list, so it was up to each lender to decide whether a full assessment was needed (para 3.27).

Even after the change, lenders still need to check whether you can afford the higher payments, following their own responsible lending policies and the FCA's Consumer Duty rules (para 1.17). These rules require lenders to act in customers' interests, deliver good outcomes and take steps to prevent foreseeable harm.

Before you commit, run the numbers on your current and new payments. A shorter term generally means higher monthly payments, and usually less interest paid over the life of the mortgage.

Lenders may also charge a fee for a mortgage term reduction, but it must represent fair value (para 3.22). Early repayment charges (ERCs), which some lenders charge if you repay your mortgage early, aren't affected.

PS25/11 didn't add a right to return to your previous term later (paras 3.14 to 3.22), so there's no automatic way back if the higher payments start to pinch. To explore your options, try our mortgage overpayment calculator or read our short term mortgage guide.

Did PS25/11 change the rules on extending your mortgage term?

No, PS25/11 didn't change the rules on extending your mortgage term. Depending on your lender and circumstances, you may be able to extend your mortgage term without a new affordability assessment, particularly where the extension doesn't take the mortgage beyond your expected retirement age. Your lender will still need to consider the relevant rules and its own lending criteria, so this isn't guaranteed. (para 3.37).

The FCA also said it won't give lenders any further guidance on when affordability checks are needed for extensions past retirement age (para 3.31).

A longer term usually means lower monthly payments, but you'll generally pay more interest overall. Later-life borrowing has its own wrinkles, and our guide to mortgage age limits in the UK covers them in more depth.

Can you talk to a lender without getting mortgage advice?

Yes. PS25/11 removed the rule that automatically triggered regulated mortgage advice when you had a conversation with a lender or broker. You can now discuss your options without automatically being moved into advice.

That includes conversations over the phone or through online chat (para 1.13): "The change will mean interactions between a firm and their customers will not immediately trigger advice."

If you carry on without advice after that conversation, the mortgage is execution-only. You choose it yourself, without a recommendation from an adviser, so you don't get the protections of a suitability assessment.

To go ahead without advice, you'll need to actively confirm that you understand what you're giving up and still want to proceed without a recommendation (para 1.15). The FCA calls this a positive election.

Firms also pick up a new duty. PS25/11 (para 1.14) requires them to "consider what procedures are appropriate to identify execution-only customers for whom advice, or other customer support, may be necessary to avoid causing foreseeable harm."

The FCA also says lenders should have ways to spot customers who might need mortgage advice or extra support, even if they've chosen to go ahead without advice.

Nothing stops you asking a lender's adviser or a mortgage broker for advice at any point, just as before. Learn more about what a mortgage broker does or find independent mortgage advice.

When is mortgage advice still required after PS25/11?

PS25/11 hasn't removed the requirement for advice in certain circumstances. Execution-only sales, where you take out a mortgage without receiving a personal recommendation, aren't permitted for some transactions, including the following. 

• Equity release: A mortgage that lets you access equity from your home, usually without monthly repayments
• Regulated sale and rent back: Selling your home and renting it back from the new owner
• Statutory right-to-buy: Buying your council or housing association home at a discount
• Debt consolidation: Borrowing against your home to pay off other debts, where that's the main purpose of the loans
• Shared equity mortgages: Certain regulated mortgages where you share in changes to the property's value with another provider.

Consolidating debts into your mortgage could mean you pay more overall and your home may be at risk if you do not keep up repayments.

The list comes from the FCA's rules on execution-only sales (MCOB 4.8A). There's more on rolling debts into a mortgage in our debt consolidation mortgage guide.

What happens if your mortgage term ends before it's paid off?

PS25/11 added a rule that lenders must treat you fairly if your mortgage term ends and you still owe money. They can't take repossession action unless all other reasonable attempts to resolve things have failed.

The FCA is clear on this, "Firms must not take repossession action unless all other reasonable attempts to resolve the position have failed" (para 1.20).

This mainly affects people with interest-only mortgages. Your monthly payments only cover the interest, so you still have to pay back the original loan when your mortgage term ends.

Before PS25/11, the FCA had separate guidance on helping interest-only borrowers who might struggle to repay their loan, and supporting people affected by rising living costs. That guidance, known as FG13/7 and FG24/2, has now been withdrawn. Instead, the requirement to treat borrowers fairly is written into the FCA Handbook (paras 1.19 and 1.20).

The FCA didn't spell out exactly what counts as a "reasonable attempt" (para 5.10). So two lenders could handle the same shortfall quite differently.

If you're worried about repaying at the end of your term, contact your lender early, while you still have breathing room.

Our guide on what to do if you're struggling to pay your mortgage can help, and our interest-only mortgage guide explains how these loans work.

What doesn't PS25/11 change for borrowers?

PS25/11 doesn't oblige any lender to use the new flexibilities, and it doesn't change lenders' own criteria. Depending on the lender and what you're changing, you may still be in for a full affordability assessment.

• Borrowing more on a remortgage: The MAA doesn't apply if you borrow more than fees, so a full assessment is likely.
• Term extensions: No change, as covered above.
• Advice: Still available, and still required in the cases listed above.
• Timing: Lenders may need time to put the changes in place (para 1.44).

Our guide on when to remortgage may help if you're still weighing up your options.

A Habito expert can talk you through remortgaging or changing your term. 

Find out what you could be eligible for with our remortgage calculator, or compare mortgage deals.

Habito is authorised and regulated by the Financial Conduct Authority (FRN 714187).

Options available to you will depend on lender criteria, affordability, and your personal circumstances.

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

Frequently asked questions

When did the FCA's PS25/11 mortgage rule changes come into force?

They came into force on 22 July 2025, the same day PS25/11 was published. But don't be surprised if your lender hasn't caught up yet. The FCA warned that lenders would need time to put the changes into practice.

Do lenders have to use the PS25/11 mortgage rule changes?

No. The FCA has made these changes optional for lenders, so they can choose whether to use them. You can shop around and check with your lender or a broker to see what's actually on offer.

Can you remortgage with a new lender without a full affordability check under PS25/11?

A new lender may use the modified affordability assessment if you're up to date, aren't borrowing more than fees, are staying in the same property, and the new deal is more affordable than your current mortgage or a new product from your current lender. Fees on the new deal count in that comparison, and the lender can still choose to carry out a full assessment instead. Our remortgaging guide covers the wider process.

Can you shorten your mortgage term without an affordability check after PS25/11?

Your lender no longer has to carry out a full affordability check if you want to shorten your mortgage term, but the higher payments still need to be considered under the lender's responsible lending policy and the FCA's Consumer Duty rules. You might also have to pay a fee, and there's no guarantee you'll be able to go back to your original term if you change your mind. So check the costs before making a decision. Our short mortgage term guide explains the trade-offs.

Can you still get mortgage advice after the PS25/11 changes?

Yes, you can ask a lender's adviser or a mortgage broker, or look into independent mortgage advice, whenever you want. What's different is that a conversation with a firm no longer turns into advice automatically. The changes don't remove the restrictions on taking out certain mortgages without advice. These include equity release, regulated sale and rent back, statutory right-to-buy, shared equity credit agreements and mortgages where the main purpose is debt consolidation. The rules can vary depending on the transaction and your circumstances.

Do the PS25/11 mortgage rules apply in Scotland, Wales and Northern Ireland?

Yes. The changes apply to FCA-regulated mortgage lenders and brokers across England, Wales, Scotland and Northern Ireland. Property laws and processes can differ, but the PS25/11 rules are the same across all four nations.

This article draws on the FCA's PS25/11 policy statement and related FCA publications. Mortgage rules and legal processes can change, so it's worth checking the latest information or speaking to a qualified adviser.

Information is correct at the time of writing and may change. Always check the latest terms and conditions before taking out a product.

Sources

• FCA, PS25/11 policy statement page
• FCA, PS25/11 (PDF, July 2025)
• FCA, CP25/11 consultation (PDF, May 2025)
• FCA press release, 22 July 2025