MCOB 8.3 Application of rules in MCOB 4
- (1) 3
- (a) 3
Subject to (c),4MCOB 4.1 to MCOB 4.6A4 (with the modifications stated in MCOB 8.3.2B R to4MCOB 8.3.4 R) apply to a firm where the home finance transaction is a lifetime mortgage.3
43 - (b)
MCOB 4.1 to MCOB 4.4A4 (with the modifications stated inMCOB 8.3.2B R to4 MCOB 8.3.4 R) apply to a firm where the home finance transaction is a home reversion plan, except for those provisions that by their nature are only relevant to regulated mortgage contracts.3
4 - (c)
MCOB 4.6A applies to a lifetime mortgage only if it is not an interest roll-up mortgage.4
- (a) 3
- (2)
The table in MCOB 8.3.3 R shows how the relevant rules and guidance in MCOB 4 must be modified by replacing the cross-references in that chapter with the relevant cross-references to rules and guidance in MCOB 8.
- (3)
The table in MCOB 8.3.4 R replaces certain rules and guidance in MCOB 4 with rules and guidance from MCOB 8.
- (4) 3
The terms that by their nature are relevant only to regulated mortgage contracts must be replaced with the appropriate equivalent terms and expressions for home reversion plans.
3The rules and guidance that are not relevant to home reversion plans are those related, for example, to interest rates, APR, higher lending charge, mortgage credit cards, multi-part mortgages and foreign currency mortgages.
3Firms should substitute equivalent home reversion terminology for lifetime mortgage terminology, where appropriate. Examples of terms and expressions that should be replaced in relation to home reversion plans are 'loan' or 'amount borrowed', which should be replaced with 'amount released' or 'amount to be released', as appropriate, and 'mortgage lender' and 'mortgage intermediary' which should be replaced with 'reversion provider' and 'reversion intermediary'.
4For the purposes of MCOB 4.4A.2R (1) there is one relevant market for equity release transactions. Accordingly, a firm offering a customer only lifetime mortgages or only home reversion plans must include in its disclosure under MCOB 4.4A.1R (1) that it is limited in that regard in the range of products that it can offer to the customer.
4In the light of MCOB 8.3.2B R, a firm may wish to consider using a sentence appropriate to the circumstances, along the following lines:
•“We offer a comprehensive range of equity release products from across the market.”
•“We sell home reversion plans only and not lifetime mortgages, though we will consider all home reversion plans available in the market.”
Table of modified cross-references to other rules: This table belongs to MCOB 8.3.1 R.
Subject |
Rule or guidance |
Reference in rule or guidance |
To be read as a reference to: |
Additional disclosure for distance mortgage mediation contracts |
MCOB 4.5 |