Mortgage rules, your rights and protection

A mortgage is the biggest debt most people ever take on, and it is also one of the most heavily regulated. Lenders and brokers in the UK must follow rules set by the Financial Conduct Authority (FCA) at every stage: how they sell, what they must tell you before you sign, how they must treat you if you fall behind, and when they are allowed to take your home. The law says a lender must treat you fairly and take your circumstances into account¹.

Those rules give you rights you can use. Your mortgage offer must be a binding document with set contents, including how to complain. If you cannot pay, your lender must offer help before repossession, and repossession itself must be a last resort. If something goes wrong, you can complain to the firm and then to the Financial Ombudsman Service, which is free to use and can award compensation of up to £455,000 for complaints referred on or after 1 April 2026 about acts or omissions on or after 1 April 2019².

What mortgage rules protect you: the duty to treat you fairly

Most home loans in the UK are regulated mortgage contracts, which means the lender and any broker involved must follow the FCA's Mortgage Conduct of Business rules (known as MCOB). These rules cover the whole life of the loan: how it is sold, what must be disclosed, how arrears are handled and how complaints are dealt with. The starting point is simple. Official guidance states that "the law says they must treat you fairly and take your circumstances into account"¹.

Fair treatment is not just a slogan. It shows up in concrete duties throughout the rules. A lender may not offer a regulated mortgage contract on the basis that fees or charges of any kind are automatically added to the sum advanced⁶, which stops the debt quietly growing through rolled-up charges. A firm must not encourage you to opt out of receiving advice on regulated mortgage contracts, or to reject advice given by it or any associate⁷, so the choice to go execution-only must genuinely be yours. And when a firm assesses your needs and circumstances, it must tell you clearly about its product range and your right to request an illustration for any regulated mortgage contract it can offer⁸.

The rules also reach into specific schemes. Under the Mortgage Charter, lenders that have signed up adopt standards for helping their regulated residential mortgage borrowers who are worried about higher rates⁹. Under the Help to Buy mortgage guarantee scheme, the terms and conditions of the mortgage set out that the lender is contacted if a borrower's circumstances change¹⁰. The same principles apply whatever the product: a Right to Buy applicant, for example, has access to the same mortgage products available on the market as everyone else¹¹. Regulation follows the loan, not the label.

Your mortgage offer: a binding document with set contents

Before a mortgage is agreed, the rules require firms to give borrowers standardised information, so the terms can be checked side by side and confirmed as matching what was discussed. The illustration stage is covered in detail on the page about the ESIS illustration. At the offer stage, the requirements are just as firm. If a firm offers to enter into an MCD regulated mortgage contract with you, it must provide you with a binding offer set out in an offer document¹². The same applies if it offers to vary the contract: an offer document must be provided then too¹².

The offer document has set contents. Its contact details section must include information on how to complain to the firm about its services in relation to the contract, and whether complaints may subsequently be referred to the Financial Ombudsman Service¹³. So the route to redress is printed on the offer itself, and you do not have to hunt for it.

The rules also govern what happens after the offer is accepted. A chapter of MCOB requires information to be supplied to customers at the start of a regulated mortgage contract to enable them to check that it has been set up in accordance with their requirements, and to notify them of the first and subsequent payments¹⁴. That information must reach you before you make the first payment under the contract¹⁴. Later, a firm must give you reasonable notice, in advance, of changes to payments resulting from interest rate changes, and of any material change to the terms and conditions that is permitted without your prior consent¹⁵. For consumer buy-to-let mortgages, creditors and, where applicable, credit intermediaries must provide an adequate explanation of the proposed contract and any ancillary services¹⁶.

Where a mortgage is sold on an advised basis, the customer must identify the deal they want, specifying at least the lender's name, the rate of interest, the interest rate type, the price or value of the property, the length of term, the sum to be borrowed, and whether it is interest-only or repayment⁷. That list is a useful checklist when you receive an offer: if any of those details differ from what you asked for, raise it before completion.

Early repayment charges and when they can be disputed

An early repayment charge is defined in the FCA's glossary as "a charge levied by the mortgage lender on the customer in the event that the amount of the loan is repaid in full or in part before a date or event specified in the contract"¹⁷. In plain terms, if you pay off some or all of the mortgage early, during a period the contract names, the lender can charge you for it. The full mechanics, including how charges are calculated and when they apply, are covered in the guide to early repayment charges.

The rules do not ban these charges, but they do shape how they must be handled, and the Financial Ombudsman Service looks at complaints about them. The ombudsman's guidance on early repayment charges explains when a charge may have been applied wrongly, for example where the terms were not made clear or where the lender's own staff gave misleading information about when the charge would bite¹⁸.

The ombudsman also deals with complaints arising from the wider process of moving between deals. Examples it cites include delays arranging a new mortgage or interest rate leading to a higher rate, lenders not telling borrowers their interest rate product was ending in time, inability to arrange a new interest rate, and lenders not offering new interest rate products to borrowers sometimes described as mortgage prisoners¹⁹. If a delay by the lender or broker left you paying a charge or a higher rate you would otherwise have avoided, that is the kind of complaint the ombudsman can consider. The page on mortgage prisoners and modified affordability covers that group of borrowers in more detail.

Moving home: porting and when a lender can refuse

Porting means taking your existing mortgage deal with you to a new property, rather than paying it off and starting again. Because most fixed and tracker deals carry early repayment charges, porting can avoid a charge that would otherwise be triggered by redeeming the loan mid-deal. How porting works in practice, including the application process, is covered in the guide to porting a mortgage when you move home.

A porting application is not guaranteed. The ombudsman's guidance is clear that a lender can refuse a porting application on other grounds, for example if the value of the new property would take the ported balance outside the loan-to-value range for the interest rate the customer wants to port¹⁸. In other words, the deal you have may only exist within a certain loan-to-value band, and a bigger loan against the new property can put you outside it. The basics of these bands are explained in the guide to loan to value.

One point of protection is worth knowing if you receive Support for Mortgage Interest (SMI), the government loan that helps with interest payments. When a claimant moves to a new property, they can transfer their SMI loan to the new property without repaying it; the outstanding balance is transferred to the new property²⁰. So moving home does not force you to settle that support early. The guide to Support for Mortgage Interest explains how the loan works.

Struggling with payments: the help your lender must offer

If you cannot pay, the rules require your lender to engage with you rather than move straight to enforcement. The FCA's payment difficulties rules (MCOB 13) apply where a customer remains in breach for more than one month of an agreed borrowing limit or of an obligation to repay where there is no regular repayment plan¹⁴. Before matters reach that point, lenders are expected to work with you, and there are several routes of help.

The Mortgage Charter is one. If you are having problems with your mortgage, you could get help from your lender if they have signed up to the Mortgage Charter²¹. The charter sets the standards signatory lenders adopt when helping their regulated residential mortgage borrowers who are worried about higher rates⁹. The page on the Mortgage Charter sets out what it offers in practice.

Beyond the charter, lenders can agree forbearance. Under the Help to Buy mortgage guarantee scheme, for example, if you are behind with your mortgage payments the lender may arrange a forbearance agreement with you, which allows you to repay any missed payments, and the scheme's guidance for anyone finding it difficult to pay is to contact the lender immediately¹⁰. In Scotland, the Home Owners Support Fund has its own eligibility conditions, including that your bank or mortgage lender will not let you lower your mortgage payments²²; the guide to the Home Owners' Support Fund covers the scheme.

There are also formal disclosure duties. The FCA's mortgage conduct rules require a firm to provide the customer with the current MoneyHelper information sheet "Problems paying your mortgage"²³, so free, impartial guidance arrives at the point it is needed. Help to Buy equity loan borrowers who need to sublet because of financial struggle, on grounds such as losing your job, a drop in your household income, or a change of circumstances that leaves you unable to afford your mortgage payments, must supply supporting evidence, including a letter from the mortgage lender confirming it will allow the sublet²⁴.

A common fear stops people asking for help early. The Financial Ombudsman Service is clear that discussing your options will not have any impact on your credit file, for example, but that if you have already missed payments, any help you receive will impact your credit file²⁵. Asking before arrears build up is therefore the position that carries no credit file consequence. The guides to mortgage arrears and arrears charges cover what happens next.

Repossession is a last resort

The rules state this in terms. FCA rules provide that a firm must not take steps to repossess a customer's home, goods or vehicles other than as a last resort, having explored all other possible options⁵. The handbook lists "taking steps to repossess a customer's home, other than as a last resort" as an example of behaviour likely to contravene the Consumer Duty²⁶. For customers whose mortgage terms have expired with a balance outstanding, firms must deal with them fairly and not take repossession action unless all other reasonable attempts to resolve the position have failed²⁷.

What this means for you is that a lender cannot jump from a missed payment to court action. It must first explore alternatives, such as the forbearance and charter options described above, and official guidance confirms there are rules covering what the lender must do if it intends to repossess your home¹. The steps a lender must complete before going to court are covered in the guide to pre-action rules, and the court process itself in the guides to repossession in England and Wales, repossession in Scotland and repossession in Northern Ireland, because the procedure differs between the nations.

If the matter does reach a court hearing, official guidance in Northern Ireland sets out what a borrower is able to bring: all letters from the lender, notes of telephone calls or meetings, a completed budget form, proof of salary or benefits, a letter from the estate agent if selling, a letter from the new lender if you have applied for a re-mortgage, proof of a change of circumstances such as a job offer, and proof of money due to you such as backdated benefit or compensation²⁸. Where the arrears arose because of illness or a medical condition which may prevent you from working, the guidance lists a letter from your GP, consultant or medical social worker explaining your condition²⁸. At the hearing, the guidance expects you or your solicitor, barrister or advice worker to be able to explain why you are behind, your financial circumstances, and your best realistic proposal to sort out the situation²⁸.

After repossession: shortfalls, sale price and lender contact

Repossession does not always end the debt. If the lender sells the property for less than you owe them, they may want you to pay back the rest of the debt, which is the mortgage shortfall¹. The sale price matters directly to what you still owe: a better sale outcome means a smaller shortfall, or none at all. The guide to mortgage shortfalls after repossession covers how these debts are pursued and what your options are.

Lenders remain subject to the fair treatment rules after possession. For borrowers whose mortgage terms have expired with a balance outstanding, firms must deal with customers fairly and not take repossession action unless all other reasonable attempts to resolve the position have failed²⁷. And your right to complain survives repossession: the Financial Ombudsman Service can look at complaints about repossession before possession takes place or after it has happened²⁵. So if the lender mishandled the sale, the arrears handling or the communications, the ombudsman route remains open. The guide to borrowing again after a repossession looks at the longer-term picture.

Interest-only and mis-sold mortgages

Interest-only mortgages carry their own rules, because the risk of having no way to repay the capital is obvious. A mortgage lender may only enter into an interest-only mortgage, or switch a repayment mortgage onto an interest-only basis for all or part of its term, if it has evidence that the customer will have in place a clearly understood and credible repayment strategy with the potential to repay the capital borrowed and any interest reasonably expected to be accrued²⁹. This rule came in with the Mortgage Market Review, which introduced the change described as "only allowing a borrower to take out an interest-only mortgage where there is a credible repayment strategy in place"³⁰.

Lenders must also have a policy for these loans. A mortgage lender which enters into interest-only mortgages (unless they are only lifetime mortgages) must include in its responsible lending policy a policy on interest-only mortgages, setting out processes and procedures for compliance and for safeguarding customers' interests during the term³¹. There is a review rule for interest-only mortgages entered into on or after 26 April 2014, but it excludes lifetime mortgages, retirement interest-only mortgages, bridging loans, and any other case where repayment of capital and interest is certain²⁹.

Retirement interest-only mortgages, often called RIO mortgages, are a defined category: an interest-only mortgage which requires the interest to be repaid in full over the stated term, entry into which is restricted to older customers above a specified age, and under which the lender is not entitled to seek full repayment until one or more specified life events occur, unless the customer breaches their contractual obligations³². The guides to interest-only mortgages and retirement interest-only mortgages explain how these work.

Where an interest-only mortgage was sold without a credible repayment strategy, that can be the basis of a mis-selling complaint. The ombudsman's approach to such complaints, including what evidence it looks at, is covered in the guide to complaining about a mis-sold interest-only mortgage. Mortgage endowment complaints, where an endowment policy was relied on to repay the loan, have their own time limits: the three-year limit runs from the date of receiving a high risk warning letter, and the rules requiring the customer to be told the final date for complaining still apply even if the policy matured or was surrendered after such a letter was received³³.

Complaining about a lender or broker

The complaint route is the same whoever you deal with. The process begins with a formal complaint to the company involved; the ombudsman becomes an option if the company does not send a final response letter within eight weeks, or if you are unhappy with its response⁴. The ombudsman's own description of the process is straightforward: "Our service is free and easy to use"⁴. Complaints are made by filling in its complaint form, and it even publishes guidelines for anyone considering using AI to help complete it⁴.

Brokers have their own duties here. Where a credit broker receives a complaint in relation to the subject matter of the scheme, it must forward the complaint to the lender and inform the consumer that it has been forwarded³⁴. The same rule appears in the scheme rules as a whole³⁵, so a broker cannot simply sit on a complaint that belongs with the lender. And there is a protection while a complaint is live: a lender must not initiate legal proceedings in relation to a regulated credit agreement where it is aware that the customer has submitted a valid complaint, or what appears to the firm may be a valid complaint, being considered by the Financial Ombudsman Service³⁶.

The ombudsman can look at a wide range of mortgage complaints. It can consider complaints about advice you received from a financial business, complaints about mortgage arrears and charges, not being able to change or move your mortgage or take a payment holiday, and complaints about repossession before possession takes place or after it has happened²⁵. It also looks at underfunding cases, where a mortgage was set up with payments too low to clear the debt. In deciding these, it weighs how the mistake with repayments came about and who is responsible, the information provided about repayments, whether the customer could reasonably have known they were not paying enough, whether they could have sorted the problem sooner, and whether the lender or broker could have picked up on problems at the time³⁷. Where someone else such as a broker made the mistake, the ombudsman cannot restructure the account but can tell them to pay the money to the mortgage account instead³⁷.

Not every complaint succeeds, and the ombudsman's case studies show why. In one published case, the lender said the mortgage was suitable and that the ombudsman service could not consider the complaint under the FCA's Dispute Resolution rules³⁸. Scope matters: the ombudsman can only take on complaints it is allowed to consider. Its quarterly data gives a sense of volume: 157 complaints about buy-to-let mortgages (consumer or non-consumer) were opened in Q1 2025/26³⁹. If your complaint is about something a trading standards issue rather than a financial rule, Consumerline in Northern Ireland can refer your complaint to the Trading Standards Service for investigation or to the Financial Conduct Authority which authorises lenders⁴⁰.

The complaint route: firm first, ombudsman second, with deadlines at each step.

Ombudsman compensation: up to £455,000

The amount the ombudsman can tell a firm to pay depends on when the complaint is referred and when the events complained of occurred. The current limits are:

The headline figure of £455,000 applies to complaints referred on or after 1 April 2026 about acts or omissions that occurred on or after 1 April 2019². Most mortgage complaints involve far smaller sums, but the limit matters where a wrongly sold loan or a mishandled arrears case has caused large losses. In one published case study, the ombudsman told the firm to pay the resulting compensation amount, up to the applicable maximum of £160,000⁴¹. Historically the money award limit was £150,000, or £100,000 for complaints received before 1 January 2012⁴².

Compensation is not only about the direct loss. The ombudsman can award for distress and inconvenience, with published guidance indicating up to £1,500 in its home insurance guidance⁴³ and up to £5,000 in its travel insurance guidance⁴⁴, the level depending on the circumstances of the complaint. In a mis-sold PPI example, the total redress was £2,995, including interest of £555⁴⁵, which shows how interest is added to refunds. From January 2026 the ombudsman applies new guidance on interest awards⁴⁶. A final decision is "legally binding if accepted by the consumer"⁴⁶, so the firm must comply if you accept it, and you are free to reject it and go to court instead.

Two practical points close the loop. First, timing: you need to make a complaint to the ombudsman within 6 months from the date on your final response³. Second, cost and representation: the service is free, and "you don't need to pay anyone to represent you, for example, a lawyer or claims management company (CMC)"³. The guide to complaining to the Financial Ombudsman about your mortgage walks through the process step by step.