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MCOB 5.1 Application



This chapter applies to a firm in a category listed in column (1) of the table in MCOB 5.1.2 R in accordance with column (2) of that table.


This table belongs to MCOB 5.1.1 R

(1) Category of firm

(2) Applicable section

mortgage lender

mortgage adviser

mortgage arranger

whole chapter


  1. (1)

    This chapter applies if a firm:

    1. (a)

      makes a personal recommendation to a customer to enter into a regulated mortgage contract; or

    2. (b)

      provides information to a customer that is specific to the amount that the customer wants to borrow on a particular regulated mortgage contract, including information provided in response to a request from a customer; or

    3. (c)

      provides the means for a customer to make an application to it;

    in connection with entering into, or agreeing to enter into, a regulated mortgage contract provided by a mortgage lender, other than a regulated lifetime mortgage contract or a variation to an existing regulated mortgage contract.

  2. (2)

    In relation to further advances and other variations, MCOB 5 is modified by MCOB 7 (Disclosure at start of contract and after sale), regardless of whether they are variations to an existing regulated mortgage contract, or are such that they involve the customer entering into a new regulated mortgage contract.1

  3. (3)

    In relation to a regulated lifetime mortgage contract, MCOB 5 is modified by MCOB 9 (Lifetime mortgages: product disclosure).1


The table in MCOB 5.1.5 G shows how the relevant rules and guidance in MCOB 5.6 apply to certain types of regulated mortgage contracts.


This table belongs to MCOB 5.1.4G

Type of mortgage

Requirements that do not apply

Additional or alternative requirements

Multi-part mortgages

MCOB 5.6.42 R (3)

MCOB 5.6.46 R

MCOB 5.6.28 R

MCOB 5.6.54 R - MCOB 5.6.57 G

Foreign currency mortgages


MCOB 5.6.127 R - MCOB 5.6.128 R

Shared appreciation mortgages


MCOB 5.6.129 R - MCOB 5.6.131 R

Deferred interest rate mortgages


MCOB 5.6.132 R

Mortgages without a term or regular payment plan

MCOB 5.6.31 R

MCOB 5.6.40 R - MCOB 5.6.57 G

MCOB 5.6.59 R - MCOB 5.6.65 R

MCOB 5.6.32 R

MCOB 5.6.134 R - MCOB 5.6.145 R


In this chapter, references to a regulated mortgage contract include, where the context requires, references to arrangements which are capable of becoming a regulated mortgage contract.

  1. (1)

    MCOB 5.1.3 R means that this chapter applies where the customer can apply to enter into a regulated mortgage contract. This includes circumstances where, for example, the means to apply is provided in person, by telephone, through a website or through an application pack sent through the post.

  2. (2)

    The effect of this chapter is to require a customer to be provided with an illustration before he submits an application to a mortgage lender.

MCOB 5.1.8G

Although an illustration is a financial promotion in respect of the controlled activity of providing qualifying credit, the effect of MCOB 3.2.5 R(1), section 145(3) of the Act (Financial promotion rules) and article 28 of the Financial Promotion Order (One-off non-real time communications and solicited real time communications) is that an illustration is exempt from the provisions of MCOB 3 (Financial promotion).


Where part of the loan is not a regulated mortgage contract, for example it is a linked unsecured loan, the details of this loan can be shown in Section 12 of the illustration as an additional feature. It should not be added to the regulated mortgage contract loan amount in MCOB 5.6.6 R(2).

MCOB 5.1.10GRP

A firm that finds any rule in MCOB 5.6 (Content of illustrations) inappropriate for the particular kind of regulated mortgage contract that the mortgage lender provides will need to seek from the FSA a waiver of that rule. SUP 8 contains details of the waiver procedure.