Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent discussions he has had with the Financial Conduct Authority on the loyalty penalty in the mortgage market.

There are comparatively high levels of customer engagement in the UK mortgage market, with 75% of customers taking out a new product within 6 months of being on the reversion rate.

Whilst the levels of customer engagement are comparatively high in the mortgage market, the Government is not complacent. That is why HM Treasury (HMT) has worked closely with the Financial Conduct Authority (FCA) on changes to their lending rules, which will remove the regulatory barrier which currently prevents some borrowers from switching to a new deal. These changes will be in place before the end of the year.

HMT also supports the current FCA research into customers who could switch at the end of the fixed introductory period but who choose to stay on the reversion rate.

No recent representations have been made to the Chancellor of the Exchequer on the loyalty penalty in the mortgage market.