Responsible Lending & Affordability

Responsible Lending and Affordability are non-negotiable principles that underpin the UK's mortgage market reform. The Mortgage Market Review (MMR) now monitors firms in the home finance business.

The FCA promised to deliver a mortgage market that works better for the consumer and is sustainable for all participants. Responsible lending is key to this approach.

Our Responsible Lending and Affordability Course explains the FCA's responsible lending and affordability rules for the home finance business in the UK.

About this Course

This SCORM-compatible course is part of our FCA Compliance Library.

The library is available in the Skillcast Standard plan for larger companies or Skillcast Basic plan for those with under 50 learners.

Learning Objectives

This course will prepare your employees to:

Recognise the requirement for treating customers fairly and acting in their best interests at all times
Understand what is meant by clear, fair and not misleading
Understand the value of building relationships of trust by taking due care and ensuring the suitability of advice

Latest Course Updates

Course redesigned with a more modern feel
Full review conducted by an FCA expert
Text & image updates throughout the course

Course outline

Welcome

What is Responsible Lending & Affordability?

- Meet the lenders...

Scenario: First-time buyers

- Exercise: Interactive or non-interactive?
- Exercise: Advised or non-advised?
- Exercise: Isabel's priorities
- Assessing needs & circumstances
- Drilling down to get the facts
- The conversation continues...
- Drilling down to clarify expectations
- Tailoring advice
- Exercise: Assessing needs & circumstances
- Exercise: Assessing income
- Lending criteria
- Assessing expenditure
- Clarifying expenditure with the customer
- Exercise: The Greens' expenditure 1
- Exercise: The Greens' expenditure 2
- Exercise: The Greens' expenditure 3
- Exercise: The follow-up meeting

Stress-testing: Affordability for the long term

- Decision time
- Exercise: The Greens get advice
- Example of simple affordability calculation

Implementing an interest-only policy

- You make the call: Interest-only mortgages
- Exercise: The rules on interest-only mortgages

Scenario: Payday loan

- Exercise: Tanya's income
- Tanya's revelation
- Exercise: Tanya's payday loan

Scenario: Handling payment shortfalls

- Exercise: Good practice for payment shortfalls
- Exercise: Isabel removes Adam's concessionary rate

Contract variations & transitional arrangements

- Checklist: Transitional arrangements
- Fair treatment of existing borrowers
- Exercise: Acting to deliver good outcomes for retail customers

Scenario: Equity release

- Exercise: Frank's equity
- Assessing Frank's needs & circumstances
- Frank eligibility
- Exercise: Frank's needs & circumstances
- Exercise: Frank's not impressed

Scenario: Contract variations

- Exercise: Lorraine's renewal
- Exercise: Assessing affordability with Lorraine

Scenario: HNW customer

- Exercise: Who is a HNW mortgage customer?
- Exercise: Assessing affordability with Curtis
- Devising a policy for HNW mortgage customers

Scenario: Sale & rent back

- Rajeev advises Irene
- Exercise: Disclosures for SRB agreements
- What Rajeev does next
- Exercise: Does Rajeev follow the rules?
- SRB safeguards
- Exercise: Irene's tenure

Vulnerable customers

Summary

Affirmation

Assessment

Course Specifications

Structure

Approximately 60-minute long e-learning course followed by a 14-question assessment.

Audience

Suitable for all staff - examples and interactivities designed for staff at all levels. No previous knowledge or experience is required.

Design

SHARD-compliant, responsive display on all devices, accessibility on screen readers, visual design controlled via a client style sheet.

Compatibility

All Windows, Mac OSX, iOS, Android (Flash-free for mobile compatibility). AICC and SCORM 1.2-compliant, suitable for both hosted and deployed SCORM or AICC.