MRT2 · Mortgage Products and Post Completion
MRT2 LO1 is about how a borrower raises more money against a home and which route fits the facts: a further advance from the current lender, a remortgage to a new one, a second charge loan, a bridging loan, or further release from a lifetime mortgage or home reversion plan. Exam questions give you a client, a balance, a rate and an ERC, then ask you to work out an LTV, a remortgage saving against the ERC, rolled-up bridging interest or what a home reversion estate receives, and to spot which MCOB rule applies. Most marks are lost by applying the right rule to the wrong route.
9 min read5 sections
Checked against: Walbrook (formerly LIBF) CeMAP spec v14, Appendix 4, MRT2 LO1 (AC1.1-1.5); FCA Handbook MCOB 11.6, 11.9, 7.6, 4.8A and 12.3; RAO art 61; FCA PS25/11; Equity Release Council standards, checked 11 Oct 2026. Independent prep, not endorsed by Walbrook (formerly LIBF).
A further advance is extra money from the lender that already holds the first charge. Because it is additional borrowing, MCOB 11.6.2R applies: the lender must show the customer can pay the sums due on the whole debt, and MCOB 11.6.6R bars reliance on a general declaration. The MCOB 11.6.3R exception for like-for-like switches does not help, because it requires no borrowing beyond the outstanding balance, other than product or arrangement fees.
| Calculation | Worked example |
|---|---|
| LTV after further advance | (£176,000 + £40,000) ÷ £320,000 = 67.5% |
| Maximum further advance at an 85% cap | 85% × £250,000 = £212,500 − £190,000 owed = £22,500 |
| Weighted rate across loan parts | (£180,000 × 4.0% + £20,000 × 6.0%) ÷ £200,000 = 4.2% |
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Trap: Candidates assume a customer with a clean record at the same lender skips affordability. Only switches with no extra borrowing escape the full assessment.
Takeaway: Further advance means new borrowing, so full MCOB 11.6.2R affordability on the whole debt, an illustration or ESIS first, and usually a separate rate.
A remortgage repays the current lender with a new lender's advance; the old charge is discharged and the new lender registers its own first charge. Customers remortgage to escape the standard variable rate when a deal ends, to raise capital their lender will not lend, or to change product features. Costs are the ERC on the old deal (a cash amount and a reasonable pre-estimate of the lender's costs, MCOB 12.3.1R), the exit fee, the new lender's fee, and valuation and legal costs unless the lender pays them as an incentive. There is no SDLT, because ownership does not change.
MCOB 11.9 lets a new or existing lender skip the MCOB 11.6.2R and 11.6.5R assessment for a mortgage prisoner if there is no additional borrowing (fees aside), the same property and no payment shortfall now or in the last 12 months. The new deal must be more affordable than the existing contract or, since PS25/11 on 22 Jul 2025, than a new deal the existing lender has indicated. The lender needs an internal switching policy.
Trap: Comparing a new deal with an expiring cheap fix and concluding MCOB 11.9 cannot apply. Since July 2025 the existing lender's indicated new deal is a valid comparator.
Takeaway: Remortgage when the saving beats ERC plus fees. MCOB 11.9 needs no extra borrowing, same property, a clean 12 months, and a more affordable deal.
