Mortgage Market News
Mortgage Market News Learn more about the Mortgage Credit Directive

Learn more about the Mortgage Credit Directive

On the 21st March the Mortgage Credit Directive (MCD) will come into force across the EU. It will affect the regulation of first and second charge mortgages and Consumer Buy to Let (CBTL) activity, which will fall under the regulation of the Financial Conduct Authority (FCA)1. Currently, Buy to Let lending is not regulated, however, with these new measures some lenders and borrowers will face tighter regulation2.

It is important to differentiate between Consumer Buy to Let (CBTL) and Business Buy to Let (BBTL) mortgages. BBTL mortgages, which are the most common, cover those who only intend to rent their property3.

CBTL mortgages, which will be most impacted, covers borrowing for properties which the owner intends to live in at some point. Many are ‘accidental landlords’. They may have inherited a property and will use it as either a residential or Buy to Let property. Alternatively their property may fall under Let to Buy4.

For business lenders, administrators and brokers the new legislation means that to carry out second charge mortgages they must be authorised by the FCA and hold the correct mortgage permissions5. Additionally they must ensure that they:

  • Provide an adequate explanation of a product’s essential features
  • Issue a binding offer
  • Provide a seven day reflection period
  • Give customers a European Standardised Information Sheet (ESIS) disclosure document6

For some borrowers the MCD changes could be considerable. All CBTL mortgage applications will be subject to affordability checks i.e. all applicants must be able to keep up repayments if the interest rate rises by 3%. For some consumers this means these mortgages will become out of reach.

However, there are also benefits for CBTL consumers. The Mortgage Credit Directive measures aim to foster a single market for mortgages and protect the consumer7. They will be better educated about their borrowing and will receive greater protection from the FCA. Mortgage holders will also have the right to repay their mortgage early, either partially or in full8. delivers truly independent and bespoke solutions, providing proactive advice while dealing with all aspects of our clients’ circumstances. We are fully authorised to handle second charge loans and CBTL mortgages. If you are looking to take out a Buy to Let mortgage, please contact us on 020 7519 4985.

Return to the Latest Market News

This Month’s Top Fixed Rate

Fixed rate
Initial rate: 1.35%

Period: 2 years

Rate will revert to a variable rate, currently 4.99% thereafter
The overall cost for comparison is 4.46%

Get This Rate

This Month’s Top Variable Rate

Variable rate
Initial rate: 0.97%

Period: 2 years

Rate will revert to a variable rate, currently 4.99% thereafter
The overall cost for comparison is 4.37%

Get This Rate

Some of this month's top interest rates are listed above; the actual rate will depend on your circumstances. Please note that this information does not contain all the details you need to choose a mortgage, ask one of our advisers for a personalised key facts illustration on 020 7519 4900. The rate displayed may become out of date at short notice.

Latest Articles/News

Case Studies

Successful negotiation of a bespoke, multi-million pound lending solution A…

Latest/Related News

It’s been an incredibly busy week, with the action beginning on Monday wi…

Press Release

States proposal to waive document duty on bonds hailed as a victory for mor…

Press Coverage

Could a retirement mortgage help you stay in YOUR home?…

LML Brochure

Download our brochure to find out more about and what we can offer

Click to Download

Sign Up

Subscribe now, to hear from us on the latest mortgage market news, products and services.

Client Testimonials


Live chat with
our team now