Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
FCA Rule Change Drives Surge in Mortgage Switching, Stonebridge Reports
New research from Stonebridge shows a significant increase in UK borrowers switching to new mortgage lenders following changes to the Financial Conduct Authority (FCA) affordability rules. The data indicates that more borrowers are accessing cheaper deals and higher loan amounts as a result.
Last July, the FCA expanded lenders’ ability to use modified affordability assessments (MAAs), making it easier for borrowers to remortgage with new lenders. Previously, many borrowers were limited to product transfers with their existing lender due to strict affordability tests.
According to Stonebridge, the number of modified assessments used for product transfers dropped sharply in the first quarter of 2026, falling from 550 to 100 year-on-year—an 82% decline. Despite this, the overall use of MAAs rose by 30% to 5,828 in the same period. The proportion of borrowers able to move to a new lender with the help of an MAA increased from 88% to 98%.
The research also found that borrowers remortgaging with new lenders are securing lower interest rates and larger loans. In Q1, the average interest rate on external MAA remortgages was 3.92%, which is 0.73 percentage points lower than before. The average loan amount for these remortgages was £194,999, representing a 141% increase. Meanwhile, loan sizes for product transfers fell by 37% to £80,749, while loan sizes for those moving to new lenders rose by 5% year-on-year.
Across the wider market, there was a 15% annual rise in overall regulated mortgage sales in Q1. Remortgage advances accounted for 29% of sales, up from 21% a year earlier.
These changes are relevant for UK letting agents and inventory clerks, as increased mortgage switching may impact landlord clients’ financing options and property management decisions.
Source: Mortgage Strategy