EU Mortgage Credit Directive FAQs

What is Consumer Buy to Let status?

For the Buy to Let (BTL) market, EU MCD has resulted in the creation of a Consumer BTL regulatory status.

For The Mortgage Works (TMW), the Consumer BTL regulatory status applies to:

  • "A borrower with no other let properties wishing to obtain a mortgage on a property that has either been inherited or has previously been occupied by the borrower or related person at any time"

This means the status will apply to the following application types:

  • Where the borrower or a family member has previously lived in the property, typically Let to Buy
  • Inherited properties

If the borrower lets any other property at the time of the application, they won’t be classed as a ‘consumer’, even if the points above apply. This regulatory determination will only apply to remortgage applications.

When completing an application, unaffected borrowers will be asked to sign a declaration, confirming that they’re aware their mortgage will remain unregulated.

How does my client submit a Consumer BTL application?

You can submit a Consumer BTL application via TMW Online, however, intermediary firms must be signed up to the FCA’s new Consumer Buy to Let Register, which can be accessed via the FCA website. For firms with existing FCA permissions, this process will be fast and relatively inexpensive.

We won’t be able to proceed with Consumer BTL applications received from firms who aren’t on this register, so we’d strongly encourage any intermediary firms to sign up.

Does TMW accept foreign currency loans?

EU MCD has introduced changes to the way foreign currency loans are defined, processed and managed.

TMW doesn't support foreign currency lending to new borrowers, including where the income derived from the property is paid to the borrower in a foreign currency.

How will I know if my client’s application will be a Consumer BTL loan?

TMW’s definition of a Consumer BTL borrower is “A borrower with no other let properties wishing to obtain a mortgage on a property that has either been inherited or has previously been occupied by the borrower or related person at any time”.

TMW Online will identify whether the application is a Consumer BTL loan through the questions you are asked during the application process. You must ensure these questions are answered accurately to ensure that the correct regulatory status is applied.

If my clients’ application is for joint borrowers, but only one borrower meets the definition of a Consumer BTL borrower, how will the loan be classed?

If either of the applicants are identified as a consumer using the definition above, then it will be classed as a Consumer BTL loan.

Is there a specific product range for Consumer BTL loans?

No, our standard range of Buy to Let products applies.

What permissions are required to submit mortgage business to TMW now the EU MCD changes have been implemented?

The following FCA permissions are required to submit applications to TMW:

  • Advising on regulated mortgage contracts
  • Agreeing to carry on a regulated activity
  • Arranging (bringing about) regulated mortgage contacts
  • Debt counselling (if you are submitting an application involving Debt Consolidation and Additional Borrowing)
  • To submit Consumer BTL applications, you’ll need to sign up to the FCA’s new CBTL register.

We hope we have answered the most common questions above, but if you’re still unsure about something, you can contact one of our experienced advisers on Broker Chat.