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  3. Point in time
    2019-10-25

MCOB 7.4 Mortgages: disclosure at the start of the contract2

Disclosure requirements

MCOB 7.4.1RRP

(Subject to MCOB 7.7.5 R) a firm that enters into a regulated mortgage contract with a customer must provide the customer with the following information before the customer makes the first payment under that regulated mortgage contract:1

  1. (1)

    the amount of the first payment required;

  2. (2)

    the amount of the subsequent payment(s) if different from the first payment;

  3. (3)

    the method by which the payment will be collected (for example, by direct debit) and the date of collection of the first and subsequent payment;

  4. (4)

    confirmation of whether, in connection with the regulated mortgage contract, insurance or investments (such as a repayment strategy3, term assurance, buildings and contents insurance or payment protection insurance) have been purchased through the firm;

    3
  5. (5)

    the first premium (and subsequent premium where different) for any insurance or investments purchased through the firm in connection with the regulated mortgage contract;

  6. (6)

    confirmation of whether the insurance or investment premiums in (5) are to be collected with the mortgage payment or separately (where the latter applies, the firm must give details or state that these will be confirmed separately);

  7. (7)

    confirmation of whether the regulated mortgage contract is a repayment mortgage or interest-only mortgage, or a combination of both;

  8. (8)

    if all or part of the regulated mortgage contract is an interest-only mortgage, a reminder to the customer to check that a repayment strategy3 is in place, if the repayment strategy3 is not provided by the firm;

    33
  9. (9)

    what to do if the customer falls into a payment shortfall3, explaining the benefit of making early contact with the firm, providing the address and telephone number of a contact point for the firm, and drawing the customer's attention to the arrears charges set out in the tariff of charges;

    3
  10. (10)

    confirmation of any linked borrowing and linked deposits; and

  11. (11)

    whether the regulated mortgage contract permits the customer to make any overpayments or underpayments of the amounts due.

MCOB 7.4.2RRP

The information in MCOB 7.4.1 R must be provided to the customer in a single communication, except (4), (5) and (6) which may be provided separately.

MCOB 7.4.3GRP

In the case of a regulated mortgage contract under which the loan is advanced to the customer in separate tranches, the amount required under MCOB 7.4.1 R(1) will be the repayment relating to the first tranche. The amount(s) required under MCOB 7.4.1 R(2) will need to reflect the fact that when each subsequent tranche is advanced, the payment that the customer will need to make will change.

Record keeping

MCOB 7.4.4RRP
  1. (1)

    A firm must make and retain an adequate record of the information that it provides to each customer at the start of the regulated mortgage contract in accordance with this section.

  2. (2)

    The record required by (1) must be maintained for a year from the date that the information is provided to the customer.