In its Business Plan for 2011/12 published today, the FSA has insisted that the Mortgage Market Review (MMR) will not become a 'one size fits all' exercise and that they will look to balance consumer protection against consumer choice.

Although the threat of an outright ban on interest only may have passed, it will be the lenders in their eagerness to show the FSA how prudent they are being that could see further tightening of criteria on interest only loans.  Some with short memories may have forgotten that self certification products disappeared from the market months before the FSA even proposed that they be banned!

In the Plan the FSA now admit that their proposal to base mortgage affordability calculations on a 25 year term was unworkable ‘given the range of personal circumstances.'