The Financial Conduct Authority (FCA) has released CP25/11: Mortgage Rule Review, its first major step toward simplifying mortgage regulation in the post-Consumer Duty landscape. The consultation outlines proposals to make mortgage processes easier, faster, and more cost-effective for consumers and lenders alike. One key area of reform is the affordability assessment - and the cost, both in time and resources, is significant.
The FCA estimates that each affordability check costs lenders an average of £31.90 in staff time, and consumers approximately £21.90, driven by document-gathering, form-filling, and back-and-forth with brokers or administrators. In high-volume lending environments, this translates to millions of pounds annually in operational overhead.
The consultation proposes two major changes to how affordability can be assessed in specific scenarios:
These changes are designed to unlock flexibility for borrowers and efficiency for lenders, while maintaining appropriate consumer protections.
Why this matters for lenders and brokers
The FCA is signalling a more proportionate and outcomes-based approach to affordability. Rather than requiring a full manual review for every change, the focus is shifting to risk-sensitive assessments that reflect the nature of the transaction and the customer’s needs.
But with this flexibility comes responsibility. Lenders still need to ensure that affordability checks are accurate, documented, and compliant with the Consumer Duty, and that customers are not exposed to foreseeable harm.
The problem with traditional affordability checks
Whether for a remortgage or a term change, assessing affordability often requires a case-by-case manual review of documents such as payslips, bank statements, and tax returns. These steps are resource intensive, prone to delays, and frustrating for both customers and operations teams.
Even with the FCA proposing a more flexible, risk-sensitive approach to affordability assessments, firms are still expected to meet their obligations under the Consumer Duty. That means ensuring checks are not just fast, but also accurate, traceable, and fair.
Automating for speed, accuracy, and scale
Sikoia’s Document Processing solution uses intelligent automation to extract, validate, and standardise customer data from a wide range of unstructured documents. This eliminates the need for manual reviews and enables underwriters to focus only on cases that require deeper scrutiny.
The benefits are substantial:
Across large mortgage books, this can unlock millions in productivity gains every year.
A timely opportunity for transformation
The FCA's paper signals a broader shift towards efficiency and customer-centricity in mortgage regulation. For institutions looking to modernise their affordability processes, the timing could not be better. By embracing solutions like Sikoia’s Document Processing, lenders can reduce cost, improve compliance, and deliver the kind of seamless experience that both customers and regulators now expect. Now is the time to review your affordability workflows and consider how automation can support your transformation goals.
Sikoia Ltd is authorized and regulated by the Financial Conduct Authority (FCA) as an Account Information Service Provider (AISP) under the Payment Services Regulations 2017 (FRN: 942979) and as a credit reference provider (FRN: 942616). Sikoia Ltd is a credit broker and not a lender. Credit is subject to status.
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