AMI: greater mortgage flexibility means more need for advice, not less

29 July 2026

Wednesday 29th July 2026, London - The Association of Mortgage Intermediaries (AMI) has published its response to the FCA’s Mortgage Rule Review consultation, Supporting First Time Buyers and Underserved Customers (CP26/18), welcoming the regulator’s ambition while cautioning that the proposals will only deliver good consumer outcomes if advice sits at the heart of them.

AMI describes the proposals as targeted and proportionate rather than a return to pre-crisis practices. AMI believes there is room to rebalance lender risk appetite responsibly, broaden opportunities for home ownership and open the door to creditworthy consumers currently locked out by existing rules, whilst retaining the underlying regulatory framework.

On repayment structures, AMI welcomes the FCA’s clear statement that interest-only is only appropriate for certain cohorts of customers with credible repayment strategies, but highlights part-and-part as the more balanced and sustainable option for many consumers, reducing long-term risk while retaining flexibility.

AMI does not believe the FCA’s proposals can be effectively implemented without advice. A key focus of its response is the role of advice in helping consumers understand their options, make informed decisions and ensuring the proposals work effectively in practice.

The trade body has also identified several areas where clarity is needed before the proposals can be implemented with confidence:

• Tailored interactive dialogue requires definition. The term previously carried specific regulatory meaning before its removal last year and reintroducing it without a definition creates liability risk for advisers and lenders, and confusion for consumers about whether they are receiving advice.
  
  
• Point-of-sale credibility assessments for follow-on repayment strategies must be written explicitly in the final rules, so advisers are not exposed to future retrospective challenge.
  
  
• Keep repayment strategies under review. Consumers need the right prompts and support to review their repayment strategy at key moments, particularly when a fixed-rate period ends. While lenders have a role through timely communications, advice can provide an important opportunity for review and constructive challenge. AMI has recommended that lenders signpost consumers to advice when executing interest-only product transfers, helping support informed decisions and good consumer outcomes.
  
  
• Non-monthly payment structures need a fuller cost-benefit analysis and wider sector discussion, given credit reference reporting is built around monthly cycles.

AMI also broadly welcomes the proposals on retirement interest only, credit-impaired borrowers, foreign currency loans and regulated bridging.

Stephanie Charman, chief executive of AMI, said:

“We share the FCA’s ambition and have been working with the regulator, consulting with our trade body counterparts and seeking insight from our members to inform our response to these proposals, many of which we deem to be sensible and proportionate for the creditworthy consumers the current rules inadvertently exclude.

“But these proposals will only work if lenders and advisers adopt and implement them, otherwise they will fail in their aim to improve access to the market for more first-time buyers. It is important that the areas highlighted by AMI are addressed by the FCA through the final rules and guidance, to ensure firms have the clarity and confidence needed to adopt the proposals effectively.

“That is also why the FCA must clearly define tailored interactive dialogue, with practical examples, to give advisers confidence and limit liability. Advisers also need confirmation that a reasonable assessment made in good faith today won’t be second-guessed decades from now.

“Our full response is available on the AMI website, and I’d urge advisers to take the time to read it. Knowing what’s proposed, and where we’ve pushed back, will help firms prepare for what comes next.

“We look forward to continuing to work closely with the regulator to help shape a framework that is practical, proportionate and delivers good outcomes for consumers. We will continue to engage with trade bodies and the wider sector as this work progresses. Our work and engagement also extends into separate, but interlinked, FCA policy work, such as defining holistic advice and the later life market study. Throughout all of this work, our goal is ensuring the intermediary voice is heard and represented.”