The FPC noted some concerns with how the affordability test has operated. In particular, the stress rate encapsulated in the test has remained broadly static, reflecting stickiness in reversion rates despite the fall in average quoted mortgage rates. This demonstrates that there is considerable uncertainty about how the stress rate encapsulated in the affordability test might move in future, and in turn about the effect the test could have.

The subject of this consultation is the FPC’s proposal to withdraw its affordability test Recommendation: