The UK’s chief financial watchdog on Tuesday unveiled plans to shake up the rules covering mortgage lenders and brokers, after finding its own regulations were damaging competition and large numbers of people were overpaying for products even if they received advice.
Under the Financial Conduct Authority’s proposed new rules, brokers who recommend a product that is not the cheapest available will have to explain their reasoning to customers.
The watchdog will also change its guidance to clarify what actions by lenders or brokers should be considered financial advice to customers, and make it easier for people to buy new mortgages without taking recommendations.
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