Mortgages regulated by the Financial Conduct Authority

Some bridging loans and short term finance options are regulated by the Financial Conduct Authority (FCA). On this page you can find a definition of what constitutes a type of FCA regulated loan, referred to as a regulated mortgage contract.

In simple terms a regulated mortgage contract is a loan secured by a charge over a residential property which is lived in by you, a family member or other close person and the purpose of the loan is not wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by you. Find more detail below.

Definition of a regulated mortgage contract

(a) (in relation to a contract) a contract which:

(i) (in accordance with article 61(3) of the Regulated Activities Order) at the time it is entered into, meets the following conditions:

(1) a lender provides credit to an individual or to trustees (the ‘borrower’); and

(2) the obligation of the borrower to repay is secured by a mortgage on land in the EEA, at least 40% of which is used, or is intended to be used, in the case of credit provided to an individual, as or in connection with a dwelling; or (in the case of credit provided to a trustee who is not an individual), as or in connection with a dwelling by an individual who is a beneficiary of the trust, or by a related person.

(ii) is not a home purchase plan, a limited payment second charge bridging loan, a second charge business loan, an investment property loan, an exempt consumer buy-to-let mortgage contract, an exempt equitable mortgage bridging loan, an exempt housing authority loan or a limited interest second charge credit union loan within the meaning of article 61A(1) or (2) of the Regulated Activities Order.

Definition of a second charge business loan

A contract that, at the time it is entered into, meets the conditions in paragraphs (i) to (iii) of article 61(3)(a) and the following conditions:

(a) the lender provides the borrower with credit exceeding £25,000;

(b) the mortgage ranks in priority behind one or more other mortgages affecting the land in question; and

(c) the agreement is entered into by the borrower wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by the borrower.

Definition of an investment property loan

A contract that, at the time it is entered into, meets the conditions in paragraphs (i) to (iii) of article 61(3)(a) and the following conditions:

(a) less than 40% of the land subject to the mortgage is used, or intended to be used, as or in connection with a dwelling by the borrower or (in the case of credit provided to trustees) by an individual who is a beneficiary of the trust, or by a related person; and

(b) the agreement is entered into by the borrower wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by the borrower.

FCA regulated loans from Affirmative

A loan which satisfies the above conditions (and is not exempt) is therefore a regulated mortgage contract, which is one of the short term finance options offered by Affirmative.

With over 100 years of combined experience in the financial lending sector, Affirmative is here to make decisions and to get to the heart of the matter when the banks do not.

Our customers are the private individuals, property developers, financial intermediaries and self-build enthusiasts who use short term finance for property to bridge a gap in funding or steer a project to success.

For fast short term finance, you can apply for an Affirmative bridging loan.

If you require a regulated mortgage contract your application to us will need to be submitted through an intermediary authorised and regulated by the Financial Conduct Authority. You can find a regulated intermediary by visiting the Financial Services Register.

If you would like more information from our team, contact us by telephone, email, Skype, or use our online chat facility.


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