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  5. Point in time
    2020-12-31

MCOB 12.5 Excessive charges: regulated mortgage contracts, home reversion plans and regulated sale and rent back agreements2

MCOB 12.5.1RRP

A firm must ensure that any regulated mortgage contract,2 home reversion plan1 or regulated sale and rent back agreement2 that it enters into does not impose, and cannot be used to impose, excessive charges upon a customer.

2
MCOB 12.5.2RRP

A firm must ensure that its charges to a customer in connection with the firm entering into, making a further advance or further release on, administering, arranging or advising on a regulated mortgage contract,2 home reversion plan or regulated sale and rent back agreement2, or arranging or advising on a variation to the terms of a regulated mortgage contract,2 home reversion plan or regulated sale and rent back agreement 2are not excessive.1

122
MCOB 12.5.3GRP

When determining whether a charge is excessive, a firm should consider:

  1. (1)

    the amount of its charges for the services or products in question compared with charges for similar products or services on the market;

  2. (2)

    the degree to which the charges are an abuse of the trust that the customer has placed in the firm; and

  3. (3)

    the nature and extent of the disclosure of the charges to the customer.

MCOB 12.5.4GRP

Mortgage lenders 1are also subject to requirements relating to responsible lending (see MCOB 11).

1
MCOB 12.5.5RRP

3A second charge lender may only charge interest on charges applied to a customer for breach of a second charge regulated mortgage contract if the interest is simple interest.