MCOB 11.5 Purpose

(1)

 This chapter requires a firm to treat customers fairly and act in accordance with the Consumer Duty (as applicable) by assessing, before deciding to:

1. (a)

   enter into a regulated mortgage contract or home purchase plan; or

2. (b)

    vary a regulated mortgage contract or home purchase plan;

whether the customer will be able to repay the sums borrowed and interest (in the case of a regulated mortgage contract) or pay the sums due (in the case of a home purchase plan).

(2)

 This chapter aims to ensure that customers are not exploited by firms that provide finance in circumstances where the customers are self-evidently unable to repay (or pay) through income and have no alternative means of repayment (or payment).

(3)

 This chapter sets out some limited exceptions to the requirement to assess the customer's ability to repay (or pay), including transitional arrangements in relation to customers with existing regulated mortgage contracts or home purchase plans which satisfy certain conditions.

(4)

 This chapter also applies in relation to extending the term of a bridging loan.