MRT2 · Mortgage Products and Post Completion
This topic covers the long list in MRT2 AC6.3-6.6: flexible and offset mortgages, equity release, self-build, foreign currency, new build, buy-to-let and consumer buy-to-let, adverse credit, second charge and bridging, the government schemes, shared ownership and equity share, and Islamic home finance. Questions test whether you can match a product to a customer and run one quick calculation: a Help to Buy repayment, a Right to Buy discount after the cap, a shared ownership rent, a buy-to-let rental cover test, a Lifetime ISA penalty or a diminishing musharaka rent. Know which products are regulated and why, and which schemes have closed or changed.
11 min read7 sections
Checked against: Walbrook (formerly LIBF) CeMAP specification v14, MRT2 LO6 (AC6.3-6.6); FCA Handbook MCOB 4.8A.7R, 8.5A.6R, 11.6; Regulated Activities Order 2001 art 61 and 63F (SI 2006/2383); Equity Release Council standards; gov.uk Help to Buy, Right to Buy, shared ownership, Lifetime ISA, 2025 Mortgage Guarantee Scheme; HMRC SDLTM28005; checked 11 Oct 2026. Independent prep, not endorsed by Walbrook (formerly LIBF).
A flexible mortgage lets the borrower overpay, underpay, take payment holidays and, on many products, draw back earlier overpayments, usually with interest calculated daily (CeMAP spec MRT2 AC6.3). Overpaying £10,000 at 5% saves about £500 of interest over the next year.
A payment holiday is not free. Interest keeps running and is added to the balance: £150,000 at 4.8% adds about £600 a month.
An offset mortgage charges interest on the mortgage minus linked savings and current account balances. The money stays accessible, which suits customers holding a tax reserve or an emergency fund. £200,000 at 5% with £45,000 of linked balances is charged on £155,000: £645.83 a month.
Trap: choosing a flexible borrow-back facility when the customer needs guaranteed access without asking the lender; that need points to an offset.
Takeaway: Flexible varies the payments. Offset reduces the balance that interest is charged on while the savings stay accessible.
| Feature | Lifetime mortgage | Home reversion |
|---|---|---|
| What happens | Borrow against the home; keep ownership | Sell a share, usually below market value; keep a lifetime lease |
| Payments | Roll-up: none. Interest-serviced: some or all interest | None |
| On death or long-term care | Loan plus rolled-up interest repaid from the sale |
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| Provider takes its share of the sale price |
| Growth in value | All yours, less the debt | Provider gets its share's growth |
Equity Release Council standards for lifetime mortgages: a fixed rate or a variable rate with a cap; the right to remain for life or until long-term care; the right to move to a suitable alternative property, subject to criteria; a no-negative-equity guarantee (never owe more than the home's value after reasonable sale costs); and penalty-free voluntary repayments, subject to criteria. ERCs are waived on a permanent move into long-term care.
MCOB 8.5A.6R lists what the adviser must weigh: whether the benefits outweigh any effect on means-tested benefits and tax; alternative ways to raise the money, such as a local authority grant or a further advance; the customer's wishes for the estate; and health and life expectancy. A drawdown plan charges interest only on money drawn, which limits growth of the debt and avoids holding a large cash sum that could cut Pension Credit.
There is no regulatory minimum age. 55 for lifetime mortgages is market practice, not a rule.
Trap: treating the no-negative-equity guarantee as an inheritance guarantee. Protecting a set share for the family is an optional feature that reduces the release.
Takeaway: Lifetime mortgage: keep the home, debt grows. Reversion: sell a share. Check grants, benefits and estate wishes first (MCOB 8.5A.6R).
