CeMAP FRE2 The Advice Framework: Clients, Disclosure, Charging & Vulnerability question: cheaper rate

CeMAP FRE2The Advice Framework: Clients, Disclosure, Charging & Vulnerability

Hassan completed his remortgage 10 days ago. He has found a cheaper rate and wants to cancel the new mortgage without penalty. What is the position?

A No right to withdraw, as the contract is concluded; he can repay early, subject to any ERC
B He can cancel within 14 days of completion, as with most other regulated consumer credit agreements
C He can cancel within 30 days, because a mortgage is a long-term contract
D He can cancel penalty-free, because the 7-day reflection period restarts at completion

Show the answer and explanation

Answer: A. No right to withdraw, as the contract is concluded; he can repay early, subject to any ERC

For an MCD regulated mortgage contract the offer must explain that, once the contract is concluded, there is no right of withdrawal (MCOB 6A.3.9R); the consumer's protection is the reflection period of at least 7 days before acceptance (MCOB 6A.3.4R). Consumer credit withdrawal rights do not apply to regulated mortgage contracts. Hassan can repay under the contract terms, but any early repayment charge will apply.

Common mistake

Assuming a mortgage has a 14-day withdrawal right like a personal loan.

Practise more FRE2 The Advice Framework: Clients, Disclosure, Charging & Vulnerability questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practising →

Study note: The Advice Framework: Clients, Disclosure, Charging & Vulnerability CeMAP FRE2practice questions & mock exams

Related CeMAP FRE2 questions

A broker's management information shows that customers who disclose a health condition are twice as likely as other customers to end up with a product that does not match their stated needs. What does the Consumer Duty require?Fiona, 52, wants to release £40,000 from her home to help her daughter with a deposit. She has a modest income and 13 years to retirement. Which approach to identifying solutions is most appropriate?A new client gives payslips showing £5,500 a month, but his bank statements show regular salary credits of £3,200 from the same employer. He says: 'The payslips are right, just put them in.' What should the adviser do?

Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.

Start practising →

Original practice material mapped to the published CeMAP FRE2 learning outcomes. Independent, not endorsed by Walbrook (formerly LIBF). Verify figures and rules against current guidance before relying on them.