Certain bridging loans and short-term finance options are regulated by the Financial Conduct Authority (FCA). This page explains what qualifies as an FCA-regulated loan, also known as a “regulated mortgage contract.”
In simple terms, a regulated mortgage contract is a loan secured against a residential property. The property must be lived in by you, a close family member, or another person closely connected to you. Importantly, the loan should not be used for business purposes—meaning it’s not meant to fund a business you’re running or plan to run.
Here’s a closer look at the details:
What is a Regulated Mortgage Contract?
A regulated mortgage contract is defined as a loan that:
(i) (As per Article 61(3)(a) of the Regulated Activities Order), at the time the loan is made, meets the following conditions:
- A lender provides credit to an individual or trustees (referred to as the ‘borrower’);
- The borrower’s obligation to repay the loan is secured by a mortgage on property located in the United Kingdom, where at least 40% of the property is used (or intended to be used) as a residence, or is connected to a dwelling. This applies to individuals or, in the case of trustees, to a beneficiary of the trust or a related person.
(ii) The loan must not fall under certain categories, such as:
- A home purchase plan
- A second charge bridging loan with limited payments
- A second charge business loan
- An investment property loan
- An exempt consumer buy-to-let mortgage
- An exempt equitable mortgage bridging loan
- An exempt housing authority loan
- A limited-interest second charge credit union loan
What is a Second Charge Business Loan?
A second charge business loan is a contract that:
(i) Meets the criteria outlined in paragraphs (i) to (iii) of Article 61(3)(a).
(ii) The borrower receives credit greater than £25,000.
(iii) The mortgage is a second charge—meaning it ranks after other mortgages on the same property.
(iv) The loan is taken out primarily for business purposes, whether for an ongoing or planned business.
What is an Investment Property Loan?
An investment property loan is a contract that:
(i) Meets the conditions set in paragraphs (i) to (iii) of Article 61(3)(a).
(ii) Less than 40% of the land secured by the mortgage is used (or intended to be used) as residential property by the borrower (or, in the case of trustees, by a beneficiary of the trust).
(iii) The loan is taken out predominantly for business purposes.
FCA-Regulated Loans from Bridging Finance Solutions
Any loan that meets the criteria above (and isn’t exempt) qualifies as a regulated mortgage contract. This is one of the types of short-term finance options available through Bridging Finance Solutions. With over 200 years of combined experience in financial lending, our team is able to make fast, informed decisions—especially in situations where traditional banks might not be able to assist.
We work with a variety of clients, including private individuals, property developers, financial intermediaries, and those engaged in self-build projects. Whether you need to bridge a funding gap or steer a project towards success, our short-term finance solutions are tailored to meet your needs.
If you’re looking for fast, short-term finance, apply directly to Bridging Finance Solutions.
For a regulated mortgage contract, your application must go through an intermediary who is authorised and regulated by the FCA. You can find a regulated intermediary on the Financial Services Register.
If you have any questions or need more information, don’t hesitate to contact us by phone or email.
Bridging Finance Solutions Group or its associated companies do not provide regulated advice or determine what does or does not constitute a Regulated Mortgage Contract. This is for your Mortgage Advisor to determine when advising you.
