LIBF CeMAP (Certificate in Mortgage Advice and Practice) — All Questions

Compared with a residential owner-occupier mortgage, a buy-to-let mortgage for a professional landlord is usually assessed primarily on:

• a.The number of the landlord's social-media followers and the level of local demand for short-term holiday accommodation
• b.The colour of the property
• c.The expected rental income relative to the mortgage interest (rental cover), alongside other criteria✓
• d.The landlord's council tax band

Buy-to-let lending is typically assessed on projected rental income covering the mortgage interest by a required margin ('rental cover' or interest coverage ratio), as well as the landlord's circumstances. Most such lending is not a regulated mortgage contract, though lenders still apply their own criteria.

A borrower who is letting a property they did not buy for business reasons (for example a former home they inherited and now rent out) may fall under:

• a.Foreclosure rules
• b.The equity of redemption
• c.The regulated consumer buy-to-let (CBTL) regime✓
• d.The commonhold regime, under which the borrower jointly manages the block's common parts with the other flat-owners

Where a borrower is not acting predominantly for business purposes, the buy-to-let may be a 'consumer buy-to-let' under the regime introduced by the Mortgage Credit Directive, giving those borrowers additional protections. Firms carrying on CBTL business must register with the FCA.

A short-term loan used to 'bridge' the gap between buying a new property and selling an existing one is known as a:

• a.Restrictive covenant
• b.Bridging loan✓
• c.Peppercorn lease
• d.Standard security

A bridging loan is short-term finance to cover a temporary funding gap - for example completing on a new home before the old one is sold, or at auction. It is typically more expensive than a mainstream mortgage and needs a clear exit strategy (usually the sale or a longer-term remortgage).

A homeowner with an existing first mortgage takes additional borrowing from a different lender, secured on the same property. This new loan is a:

• a.Second charge, ranking behind the first mortgage in priority✓
• b.A ground rent
• c.A first charge that automatically ranks ahead of the existing mortgage because it was the more recently advanced loan
• d.An unsecured personal loan

A loan from another lender secured on a property that already has a mortgage is a second (subsequent) charge. It ranks behind the first charge, so on sale the first-charge lender is repaid first. Because of the extra risk, second-charge loans generally carry higher interest rates, and (if regulated) fall under MCOB.

A 'joint borrower sole proprietor' (JBSP) arrangement is one where:

• a.The property has no mortgage
• b.The lender owns the property outright
• c.Two people own the property jointly but only one of them is liable to make the monthly mortgage repayments to the lender
• d.More than one person is party to the mortgage and liable for repayments, but only one (or some) of them is named on the property's legal title✓

Under a joint borrower sole proprietor mortgage, an additional person (often a parent) joins the mortgage and is liable for repayments to boost affordability, but is not an owner on the title. This can help first-time buyers, though the supporting borrower takes on liability without owning the property and should consider the implications, including SDLT.

A 'higher lending charge' (sometimes called a mortgage indemnity guarantee) is a fee a lender may charge on high loan-to-value lending to:

• a.Cover the lender against the extra risk of the borrower defaulting where the loan is a high proportion of the value✓
• b.Pay the borrower's deposit
• c.Buy the borrower's contents insurance
• d.A charge that reduces the borrower's interest rate to zero for the first few years in return for a single upfront fee

On high-LTV loans a lender may levy a higher lending charge to fund insurance protecting the lender against loss if the borrower defaults and the sale does not cover the debt. It protects the lender, not the borrower, who may still owe any shortfall even after the insurer pays out.

Under a typical 'shared ownership' scheme, the occupier:

• a.Owns the whole freehold of the property immediately and pays no rent at all to any housing association or provider
• b.Buys a share of the property (often on a lease) and pays rent to a housing provider on the remaining share, usually with the option to buy more (staircasing)✓
• c.Rents the entire property with no ownership at all
• d.Owns only the garden

Shared ownership lets a buyer purchase a share (commonly via a lease) and pay rent on the rest to a housing association or provider, with the ability to buy further shares over time ('staircasing'). It is aimed at those who cannot afford to buy outright, and specialist mortgage products apply.

The statutory 'Right to Buy' has historically allowed:

• a.Leaseholders to avoid all service charges
• b.Any private tenant to buy any property they happen to be renting at half of its current open-market value on request
• c.Eligible council (secure) tenants to buy their home, often at a discount based on how long they have been tenants✓
• d.Landlords to force tenants to buy

The Right to Buy has allowed eligible secure council tenants to purchase their home, usually at a discount linked to their length of tenancy, subject to conditions and limits. The scheme's availability, discounts and rules vary over time and between the UK nations.

A mortgage that is 'portable' allows the borrower to:

• a.Change lenders without any application
• b.Increase the loan without limit automatically
• c.Transfer the existing mortgage deal to a new property when they move, subject to the lender's criteria✓
• d.Avoid all early repayment charges in every case, whatever the reason the borrower has for repaying the mortgage early

Portability lets a borrower move their existing mortgage product (rate and terms) to a new property when moving home, subject to the lender re-assessing affordability and the new property meeting its criteria. It can help borrowers avoid losing a favourable rate or paying early repayment charges, though any additional borrowing is usually on separate terms.

In a house purchase, the buyer's 'deposit' represents:

• a.The portion of the purchase price the buyer funds themselves, with the mortgage funding the balance✓
• b.The ground rent for the first year
• c.A non-refundable fee paid to the estate agent to cover the cost of arranging viewings and marketing the property
• d.The lender's arrangement fee

The deposit is the buyer's own contribution to the purchase price; the mortgage covers the remainder. A larger deposit means a lower loan-to-value ratio, giving access to better rates and more lender choice. A deposit is also paid on exchange of contracts as a commitment to complete.

In MCOB, a sale is treated as 'advised' whenever the firm:

• a.Reads out the lender's standard variable rate
• b.Simply hands the customer a printed list of every product available across the whole of the market for them to read
• c.Gives the customer a personal recommendation on a particular regulated mortgage contract✓
• d.Hands the customer a copy of the lender's brochure without comment

A sale becomes advised as soon as the firm makes a personal recommendation to a specific customer to enter into (or vary) a particular regulated mortgage contract (MCOB 4.7A). Simply giving factual information or an unfiltered list of products is not advice and does not trigger the suitability rules.

Under the initial disclosure requirements in MCOB 4.4A, a firm must tell the customer, early in the process, information about:

• a.A detailed estimate of the customer's likely credit score, worked out from their postcode and date of birth alone
• b.The names of every borrower the firm has ever helped
• c.The current value of the property to two decimal places
• d.The service offered, including whether advice covers the whole market or a limited range of lenders✓

MCOB 4.4A requires the firm to disclose the nature and scope of its service at the outset, including whether it advises on products from across the market, from a limited number of lenders, or from a single lender, so the customer understands the limits of the service before proceeding.

A firm that advises only on the mortgage products of three named lenders must describe its service to customers as:

• a.Execution-only
• b.Unregulated introducing
• c.Advising on a limited range of lenders or products✓
• d.Independent and whole-of-market

Where a firm does not consider products from across the whole of the market, MCOB requires it to make clear that its advice is based on a limited range of lenders or products. Only a firm that genuinely considers a comprehensive range may describe its service as covering the whole market.

A branch adviser who can recommend only the mortgages offered by the bank that employs them should disclose that the advice is:

• a.Not advice at all, because the adviser is employed
• b.Restricted to the products of a single lender✓
• c.Independent, drawn from the whole of the market
• d.Given on an execution-only basis by default

An adviser tied to one lender gives restricted advice from a single provider's range and must say so under MCOB 4.4A. The customer can then decide whether to seek advice elsewhere on products the tied adviser cannot access.

Which statement best describes an execution-only mortgage sale under MCOB 4.8A?

• a.The firm recommends a specific product to the customer but simply chooses not to write down the reasons behind it
• b.The firm assesses suitability but does not tell the customer the result
• c.The customer must always pay a higher fee than on an advised sale
• d.The customer, not the firm, chooses the product and no personal recommendation is made✓

On an execution-only sale the customer selects the product themselves and the firm makes no personal recommendation (MCOB 4.8A). Because no advice is given, the MCOB 4.7A suitability assessment does not apply, though responsible-lending and affordability duties on the lender still do.

MCOB restricts execution-only sales because, for most interactive sales to retail customers, the default position is that the customer should receive:

• a.Advice, so that suitability is assessed✓
• b.A discount on the arrangement fee
• c.No contact with the firm at all
• d.Only a written brochure

Following the Mortgage Market Review, MCOB made advice the norm for interactive (for example face-to-face or telephone) sales, precisely so that a suitability assessment is carried out. Execution-only is confined to defined situations where the customer positively opts out of advice or qualifies for a specific exception (MCOB 4.8A).

An existing borrower simply wants to switch to a new rate with their current lender, with no additional borrowing. Under MCOB this rate switch:

• a.Must always be conducted as a full advised sale, complete with a detailed fact-find covering every area of the customer's finances
• b.Cannot lawfully be arranged at all
• c.May be carried out on an execution-only basis if the customer chooses, as a permitted exception✓
• d.Requires a fresh ESIS but no affordability consideration ever

MCOB 4.8A allows certain transactions, including a rate switch or product transfer with no additional borrowing, to proceed execution-only where the customer elects, without triggering the full advised-sale process. This reflects the lower risk where the customer keeps the same lender and simply changes rate.

Under MCOB 5A, at what point must a customer be provided with an ESIS?

• a.Only if the customer asks for one in writing
• b.Only after completion of the mortgage
• c.In good time before the customer submits an application, and whenever a personalised illustration is given✓
• d.Only once the mortgage has completed and the borrower has made at least twelve consecutive monthly payments without arrears

MCOB 5A requires the ESIS to be given in good time, without undue delay, once the firm knows the customer's needs and before the customer is bound by an application, so the customer can consider the loan's key features and costs before committing.

Which of the following must an ESIS contain?

• a.The amount borrowed, the interest rate, the monthly payment and the APRC✓
• b.A list of the lender's other customers
• c.The borrower's National Insurance number
• d.The estate agent's commission

The ESIS is a standardised disclosure document that sets out the loan amount, interest rate and type, the payments, the total amount payable, any fees and the APRC, so the customer can understand and compare the mortgage's cost (MCOB 5A). It does not include unrelated personal or third-party data.

Following a binding mortgage offer made under the Mortgage Credit Directive rules, the customer benefits from:

• a.The right to demand a different lender
• b.A reflection period of at least seven days during which they may consider the offer✓
• c.An automatic reduction in the loan amount
• d.A legally guaranteed interest rate that is fixed for the entire mortgage term and can never be varied by the lender

The MCD introduced a reflection period: the binding offer must remain available for at least seven days so the customer has time to compare offers and take advice. The customer may accept before the period ends but cannot be pressured to do so.

When advising a customer who wants an interest-only mortgage, MCOB 4.7A suitability requires the adviser to be satisfied that:

• a.The customer intends to sell within a year
• b.The house prices in the local area are effectively certain to rise steadily throughout the whole of the mortgage term
• c.The customer is under 30 years of age
• d.The interest-only basis is appropriate and the customer has a plausible way of repaying the capital✓

Suitability on an advised sale requires the adviser to consider not just affordability of the monthly interest but whether an interest-only arrangement genuinely suits the customer, which links to the responsible-lending requirement for a credible capital repayment strategy (MCOB 4.7A and MCOB 11.6).

A customer asks to consolidate expensive unsecured debts into their mortgage. Under MCOB 4.7A the adviser must, among other things:

• a.Ignore the interest rate on the existing unsecured debts
• b.Refuse to discuss debt consolidation under any circumstances
• c.Always recommend the consolidation whenever it lowers the customer's total monthly outlay, treating the reduced payment as conclusive proof that the arrangement must be suitable for them
• d.Take account of the effect of securing the debt over a longer term, including the risk to the home and the total cost of borrowing✓

MCOB requires the adviser, when recommending debt consolidation, to consider that spreading previously unsecured debt over the mortgage term can increase the total interest paid and puts the home at risk, weighing this against the lower monthly cost, so the recommendation is genuinely suitable.

On an advised sale, if the only mortgage the firm can recommend has features that are not ideal for the customer, the adviser should:

• a.Explain the disadvantages so the customer can make an informed decision, and record this✓
• b.Automatically decline to help the customer altogether
• c.Deliberately conceal the product's disadvantages from the customer so that they are not discouraged from going ahead with the purchase
• d.Proceed without comment because a product was found

The suitability duty and the Consumer Duty require the adviser to give a balanced explanation, drawing the customer's attention to any material disadvantages of the recommended product, and to keep a record of the advice given and the reasons for it (MCOB 4.7A).

How long must a firm generally keep records demonstrating the suitability of the mortgage advice it has given?

• a.For no fixed period, at the firm's discretion
• b.For at least three years from the date of the personal recommendation✓
• c.Until the customer's next birthday
• d.For 24 hours only

MCOB requires firms to make and retain a record showing why a recommended regulated mortgage contract was assessed as suitable, and to keep it for at least three years. Good records protect both the customer and the firm if the advice is later questioned.

A mortgage intermediary will receive a procuration fee from the lender. Under MCOB the intermediary must:

• a.Disclose that it will receive the fee, and its amount where required, to the customer✓
• b.Keep the amount of the procuration fee entirely secret from the customer, disclosing it only to the lender that pays it
• c.Refund the fee to the customer in every case
• d.Pay the fee to the FCA

MCOB disclosure rules require the intermediary to tell the customer about payments it will receive from the lender, such as a procuration fee, so the customer can judge any potential influence on the advice. Transparency of remuneration supports the Consumer Duty's price-and-value outcome.

Where a firm intends to charge the customer a fee for arranging the mortgage, MCOB requires that the fee is:

• a.Charged to the customer only after the mortgage has been fully repaid at the very end of its term, not before
• b.Payable only by customers who reject advice
• c.Disclosed to the customer, in cash terms where possible, before the customer is committed✓
• d.Set at a level fixed by the FCA for all firms

MCOB requires any customer-borne fee to be disclosed clearly and early, in cash terms where practicable, and reflected in the ESIS, so the customer understands the full cost of using the firm before deciding to proceed.

Under MCOB, an interactive sale of a lifetime mortgage (equity release) to a retail customer must normally be:

• a.Completed without any disclosure documents
• b.Arranged only by the customer's solicitor
• c.Execution-only in every case
• d.Advised, with a personal recommendation and suitability assessment✓

Because equity release is higher-risk and typically involves older, potentially vulnerable customers, MCOB 8.5A generally requires advice for interactive equity-release sales, restricting execution-only to narrow exceptions. A suitably qualified adviser must assess suitability.

The Consumer Duty requires an adviser dealing with a customer showing signs of vulnerability to:

• a.Decline to serve the customer at all, on the basis that any sign of vulnerability makes the relationship too risky for the firm
• b.Charge the customer a higher fee to cover extra risk
• c.Ignore the vulnerability so as to treat everyone identically
• d.Take reasonable steps to meet the customer's needs and support good outcomes✓

Under the Consumer Duty (PRIN 12 and the consumer-support outcome), firms must respond to the needs of customers in vulnerable circumstances, for example by allowing more time, using clearer explanations or offering additional support, so vulnerable customers achieve outcomes as good as other customers'.

The Consumer Duty's 'consumer understanding' outcome means that mortgage communications should:

• a.Be written only in precise technical and legal language, on the assumption that this protects the firm from any later dispute
• b.Equip customers to make effective, informed decisions and be tested for understanding where appropriate✓
• c.Never mention any risks
• d.Be as long as possible to cover every detail

The consumer-understanding outcome under PRIN 2A requires firms to communicate in a way that supports informed decisions, using clear, timely information and, where appropriate, testing communications so customers actually understand what they are agreeing to.

If a customer positively rejects the offer of advice and insists on proceeding without it, the firm should:

• a.Tell the customer no products are available to them
• b.Give advice anyway and charge for it
• c.Refuse to deal with the customer under any circumstances once they have declined to receive advice from the firm
• d.Treat the sale as execution-only where permitted, and record that the customer declined advice✓

MCOB 4.8A allows a customer to opt out of advice in permitted circumstances; the firm should then proceed on an execution-only basis, make no personal recommendation, and keep a record that the customer chose to proceed without advice.

A high-net-worth mortgage customer may fall within a specific MCOB exception from some advised-sale requirements. Broadly, such a customer is one with:

• a.A deposit of at least 5%
• b.Any customer who owns their car outright
• c.A completely unblemished, perfect credit score together with several years of continuous full-time employment
• d.A high annual net income or substantial net assets above the thresholds set in MCOB✓

MCOB defines a high-net-worth mortgage customer by reference to income and net-asset thresholds. Such customers, and certain business borrowers, may be dealt with under tailored provisions, on the basis that they are better placed to assess a transaction themselves.

'Porting' a mortgage means the customer:

• a.Switches to an interest-only basis
• b.Transfers their existing mortgage deal to a new property when they move home✓
• c.Adds a second charge to the property
• d.Extends the term into retirement

Porting lets a borrower carry an existing mortgage product, and its rate, across to a new property, subject to the lender's criteria and a fresh affordability assessment on any additional borrowing. An adviser should check whether porting is available and suitable when a customer plans to move.

When a customer seeks additional borrowing (a further advance) from their existing lender, the firm should:

• a.Treat it as never requiring any assessment
• b.Grant the additional borrowing only on condition that the customer first waives all of their statutory rights and protections
• c.Consider whether advice is appropriate and ensure the additional borrowing is affordable and suitable✓
• d.Automatically decline it

A further advance is additional secured borrowing and, unlike a simple rate switch, brings affordability and suitability firmly into play. Where advice is given the adviser must assess suitability, and the lender must assess affordability on the increased borrowing under MCOB 11.6.

An adviser recommends a mortgage with a five-year early repayment charge to a customer who has said they expect to move within two years. This recommendation is likely to be:

• a.Suitable in every case, purely because the headline interest rate on the product happens to be low at the moment
• b.Unsuitable, because the likely early repayment charge conflicts with the customer's stated plans✓
• c.Irrelevant to suitability
• d.Suitable, because early repayment charges never apply on moving

Suitability under MCOB 4.7A must reflect the customer's stated circumstances and objectives. Recommending a product whose early repayment charge would probably bite when the customer moves, as they have said they will, ignores a known need and is likely to be unsuitable.

Under MCOB, a 'personal recommendation' that makes a sale advised is one that is:

• a.A general advertisement broadcast to the public at large, containing no reference to any individual customer's circumstances
• b.Presented as suitable for that particular customer, or based on their circumstances✓
• c.A factual comparison table with no steer
• d.The lender's published rate sheet

A personal recommendation is guidance presented as suitable for the specific customer, or given on the basis of their particular circumstances. Generic information, advertisements and unfiltered comparison data are not personal recommendations and do not, by themselves, make a sale advised.

A tied adviser can offer the customer a product that is clearly cheaper elsewhere but which the adviser cannot access. Under the Consumer Duty and MCOB the adviser should at least:

• a.Make clear the limited scope of the service so the customer can shop around✓
• b.Claim to the customer that the tied product is definitely the cheapest one available anywhere in the whole market
• c.Guarantee to match any rate in the market
• d.Refuse to reveal that the service is restricted

MCOB 4.4A requires disclosure of restricted scope, and the Consumer Duty requires firms not to mislead. A tied adviser must not imply the product is market-leading and should make the limits of the service clear so the customer can decide whether to seek wider advice.

The document that replaced the old Key Facts Illustration (KFI) for most regulated mortgages after 21 March 2016 is the:

• a.Buildings insurance schedule
• b.Consumer credit agreement
• c.Annual mortgage statement
• d.European Standardised Information Sheet (ESIS)✓

The Mortgage Credit Directive replaced the KFI with the ESIS as the standardised pre-contract disclosure document for regulated mortgages (MCOB 5A), although some firms used a transitional period before adopting it fully.

A customer contacts a firm purely to obtain factual information about the difference between fixed and tracker rates, with no recommendation sought or given. This interaction is:

• a.A regulated mortgage contract in itself
• b.The provision of information, which is not advice✓
• c.An execution-only sale that must be reported to the FCA
• d.An advised sale requiring a full fact-find

Explaining generic product features, without steering the customer towards a particular contract as suitable for them, is providing information rather than advice. The suitability rules in MCOB 4.7A apply only once a personal recommendation is made.

Before making a recommendation, an adviser conducting an advised sale must gather enough information about the customer to:

• a.Predict future house prices
• b.Set the lender's standard variable rate
• c.Assess the customer's needs, circumstances and objectives✓
• d.Guarantee the mortgage will be approved

MCOB 4.7A requires the adviser to obtain relevant information about the customer's needs and circumstances, through a fact-find, so that any recommendation is genuinely based on the customer's situation rather than assumptions or the firm's commercial preferences.

The FCA's Principle that most directly requires a mortgage adviser to deliver good outcomes for retail customers is:

• a.Principle 4 (financial prudence)
• b.There is no such Principle
• c.Principle 1 (integrity) alone
• d.Principle 12, the Consumer Duty✓

Principle 12, the Consumer Duty, requires firms to act to deliver good outcomes for retail customers and sits above the earlier Principles 6 and 7 for in-scope business. It is supported by the detailed rules in PRIN 2A and the four outcomes.

A customer says affordability is their priority and they want certainty of payments for a set period. Which product feature is the adviser most likely to focus on as suitable?

• a.An offset facility only
• b.A capped-and-collared rate with a high collar
• c.A standard variable rate
• d.A fixed rate for an initial period✓

Suitability means matching the recommendation to the customer's stated objective. A customer who values payment certainty for a period is best served by considering a fixed rate, which keeps payments the same during the fixed term, rather than a variable rate whose payments can change.

Which of the following is NOT, by itself, a personal recommendation triggering the advised-sale rules?

• a.Advising the customer to consolidate debts into a named mortgage
• b.Recommending the customer take a particular offset product
• c.Telling a customer that a specific two-year fix is right for them
• d.Sending the customer the lender's public best-buy advertisement✓

A public advertisement is a financial promotion, not a personal recommendation to an individual customer. The other options each steer a specific customer towards a particular contract as suitable and therefore constitute advice under MCOB 4.7A.

When a firm gives advice, MCOB requires that the recommended regulated mortgage contract is:

• a.Chosen at random to remain impartial
• b.Always the cheapest headline rate regardless of fees
• c.The most suitable, or one of several suitable options, from those the firm can offer✓
• d.The one that happens to pay the adviser or the firm the single largest commission or procuration fee available

MCOB 4.7A requires the firm to recommend a contract that is suitable for the customer from its available range. Where several are suitable the firm should generally recommend the most suitable, but must not let its own remuneration drive an otherwise unsuitable choice.

A customer's circumstances change materially between the initial fact-find and completion. Best practice under MCOB and the Consumer Duty is for the adviser to:

• a.Ignore the change in the customer's circumstances entirely so as not to risk delaying the completion of the mortgage
• b.Increase the loan to cover any new expenditure
• c.Cancel the customer's application without discussion
• d.Reassess whether the original recommendation remains suitable✓

Suitability must reflect the customer's actual circumstances. A material change, such as a job loss or a new dependant, means the adviser should revisit the recommendation to ensure it remains suitable and continues to support a good outcome before completion.

Under MCOB, which of these must a firm provide, in durable medium, to a customer on an advised sale?

• a.A record of the recommendation and, where required, the reasons it is considered suitable✓
• b.Nothing needs to be provided in writing at any stage, because a brief verbal explanation is always sufficient on its own
• c.The internet browsing history of the adviser
• d.Only a verbal summary at completion

MCOB requires firms to confirm the advice and keep a suitability record showing why the recommendation was appropriate. Providing this in a durable medium protects the customer and evidences that the suitability obligation in MCOB 4.7A was met.

A distance (for example telephone or online) mortgage sale to a consumer must still comply with:

• a.Only the lender's internal policy
• b.MCOB, including disclosure and, where advice is given, suitability requirements✓
• c.The Consumer Credit Act 1974 and its regulations, rather than MCOB, because the sale takes place at a distance
• d.No conduct rules, because there is no face-to-face meeting

MCOB applies regardless of the sales channel. Distance sales must still meet initial disclosure, ESIS and, on advised sales, suitability requirements, together with any distance-marketing information obligations, so consumers are protected whether they buy in person, by phone or online.

An adviser recommends a mortgage but fails to tell the customer about a significant fee added to the loan. This is most likely a breach of the requirement that communications be:

• a.Kept confidential from the customer
• b.Clear, fair and not misleading✓
• c.Written only in the lender's house style
• d.Approved by the Financial Ombudsman Service

Omitting a significant cost can make a communication misleading, breaching MCOB and the FCA's Principles, which require communications to be clear, fair and not misleading. The Consumer Duty reinforces this through the consumer-understanding outcome.

A firm describing itself as offering 'independent' mortgage advice implies that it:

• a.Considers products from across the market and is not tied to particular lenders✓
• b.Works for a single lender
• c.Guarantees the customer the lowest possible mortgage rate available anywhere in the country at that time
• d.Provides advice free of any regulation

Describing a service as independent or whole-of-market indicates the firm considers a comprehensive range of products and is not restricted to particular lenders. Using such terms when the service is in fact restricted would breach MCOB 4.4A disclosure and the requirement not to mislead.

Where a customer wants a mortgage that the firm assesses as unsuitable but the customer still insists on it, the firm should:

• a.Not recommend it; the customer may proceed execution-only where permitted, with the position recorded✓
• b.Record it as a suitable advised sale
• c.Immediately report the customer to the FCA for insisting on a product that the firm has assessed as unsuitable for them
• d.Recommend it anyway to keep the customer happy

An adviser must not give a personal recommendation for a contract it considers unsuitable. If the customer still wishes to proceed, the appropriate route is execution-only where the rules permit, making clear no recommendation is given and recording the customer's decision (MCOB 4.7A and 4.8A).

The purpose of the ESIS's second APRC (the illustrative higher APRC) is to show the customer:

• a.The lender's profit margin
• b.The estate agent's fee
• c.The stamp duty due
• d.How the cost could look if the interest rate rose to an illustrative higher level✓

The MCD requires the ESIS to show a second APRC based on an illustrative higher borrowing rate, warning the customer how costs could rise if rates increase. This complements the responsible-lending stress test the lender applies under MCOB 11.6.