MRT1 · Mortgage Law, Practice and Application
The first question on any mortgage case is whether the loan is regulated at all. MRT1 tests the RAO art 61 definition through fact patterns: mixed-use buildings, relatives, trusts, companies, land abroad and second charges. It then asks what kind of borrower you are dealing with, who cannot borrow, and which MCOB duties sit with the lender and which with the adviser. Get the definition right and a large share of the LO1, LO3 and LO4 marks follows.
9 min read6 sections
Checked against: Walbrook (formerly LIBF) CeMAP qualification specification v14 (July 2026), MRT1 LO1, LO3, LO4; Regulated Activities Order 2001 arts 61, 61A, 62; Mortgage Credit Directive Order 2015 art 4; FCA Handbook MCOB 4.4A, 4.7A, 4.8A, 5A.4, 6A.3, 11.6, 11.9 (handbook.fca.org.uk); Law of Property Act 1925 ss1, 85, 105; Insolvency Act 1986 s360; FCA FG21/1, checked 11 Oct 2026. Independent prep, not endorsed by Walbrook (formerly LIBF).
The definition is in the Regulated Activities Order 2001 (RAO) art 61(3)(a). A contract is a regulated mortgage contract if, at the time it is entered into, all three conditions below are met and no exclusion in art 61A applies. The exclusions that matter most are the two buy-to-let ones: an investment property loan (less than 40% occupied by the borrower or a related person, and taken for business) and an exempt consumer buy-to-let contract.
| Condition | What it means | Fails when |
|---|---|---|
| Borrower | Credit is given to an individual or to trustees | The borrower is a company, an LLP or another corporate body |
| Security | Repayment is secured by a mortgage on land in the UK (a charge; in Scotland, a heritable security) | The land is abroad (contracts from 31 December 2020) |
| Dwelling use | At least 40% of the land is used, or intended to be used, as a dwelling (for trustees, by a beneficiary or a related person) | The dwelling share is under 40% |
Every note. Every question. One pass.
4 more sections of this note are part of Premium.
From ≈£2.72/mo on the Until-you-qualify pass (18 months)
Trap: Candidates check the 40% figure and stop. A buy-to-let falls out through art 61A: a 45% flat let to a stranger for business is an investment property loan, not a regulated mortgage contract.
Takeaway: Individual or trustees, UK land, 40% dwelling, and no buy-to-let exclusion. Family occupation keeps it regulated.
