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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.


  1. (1)

    This chapter applies if a firm:

    1. (a)

      advises a particular5 customer to enter into, or arranges an execution-only sale in,5 a home finance transaction2; or

    2. (b)

      provides information to a customer that is specific to the amount to be provided on a particular home finance transaction2, 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 home finance transaction provided by a home finance provider, other than an equity release transaction or a variation to an existing home finance transaction2.

  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 home finance transaction2, or are such that they involve the customer entering into a new home finance transaction2.1

  3. (3)

    In relation to an equity release transaction2, MCOB 5 is modified by MCOB 9 (Equity release2: 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 home finance transaction2 include, where the context requires, references to arrangements which are capable of becoming a home finance transaction2.

  1. (1)

    MCOB 5.1.3 R means that this chapter applies where the customer can apply to enter into a home finance transaction2. 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 key information about a home finance transaction before he submits an application to a home finance provider2.

MCOB 5.1.8G

Although an illustration is a financial promotion, the effect of MCOB 3.2.5 R(1), Section 137R(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). However, the general requirement to communicate information in a way which is clear, fair and not misleading applies to both an illustration and (in relation to a home purchase plan) a financial information statement (see MCOB 5.8.1 R).2


In relation to a regulated mortgage contract, where2 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 FCA a waiver of that rule. SUP 8 contains details of the waiver procedure.