Mortgage Suitability Report: What to Include

A suitability report is where the reasoning behind your recommendation reaches the client in writing. The FCA's reviews have been critical of how often that reasoning is generic, scripted, or about things that were never discussed.

This post covers what the rules say about the advice and the record behind it, what the FCA has found, and what a report that holds up contains. For the notes that sit behind the report, see how to write mortgage file notes.

What the rules require

MCOB 4.7A sets out the suitability rules for advising on a regulated mortgage contract. These are the parts that matter for the report.

Rule	What it requires	What it means for the report
MCOB 4.7A.2R and 4.7A.5R	Take reasonable steps to ensure the contract is suitable: appropriate to the customer's needs and circumstances, and based on the facts the customer disclosed and other relevant facts you are, or should reasonably be, aware of	The reasons in the report need to trace back to facts on the file
MCOB 4.7A.6R	Consider the factors that are relevant, such as lender eligibility, interest-only or repayment, term, payment stability against future rate changes, early repayment, other features, the customer's credit history, and whether fees are paid upfront or added to the loan. MCOB 4.7A.7G says the list is not exhaustive	The report should show which of these mattered to this client and what you concluded
MCOB 4.7A.19R	Explain that the assessment is based only on the customer's current circumstances and any reasonably foreseeable changes	A line in the report, or something you tell the client another way
MCOB 4.7A.23A R	Where your range has more than one suitable contract and you recommend one that is not the cheapest of them, explain why. Cheaper means a lower total payable over the relevant period, including fees paid directly	The report is a natural place for this explanation, and the explanation must be recorded
MCOB 4.7A.25R	Make and keep a record of the customer information, why the advice meets the suitability requirement, the customer's positive choice to have fees added to the loan where that applies, and any 4.7A.23A R explanation. Keep it for at least three years	Three years is a minimum, not a retention policy

Retirement interest-only has its own rule. Under MCOB 4.7A.10A R(3), where the customer declines to seek further information on means-tested benefits or tax, the firm may still advise but must confirm to the customer, in a durable medium, the basis on which the advice has been given.

A written report is not mandatory as such. TR15/9 (2015) notes there is no requirement for advisers to write to customers explaining their recommendations, and that most firms choose to. In June 2020 the FCA said the same of suitability letters in equity release advice (about equity release under MCOB 8, not first-charge advice under MCOB 4.7A). As at 16 October 2026, MCOB 4.7A does not ask for one, and where MCOB 4A.2.1R applies, the explanations before a binding offer may be given orally or in a durable medium. Your network or lender may still ask for a report. The record in MCOB 4.7A.25R is required either way, and the report is usually how the reasoning reaches the client.

What the FCA found in 2015

TR15/9 looked at mortgage advice after the Mortgage Market Review. It is the FCA's own published view on these letters. It dates from July 2015, before the Mortgage Credit Directive rules (2016) and the Consumer Duty (2023), so read it as an observation by the regulator at the time, not as current statistics.

• The sample: 134 mystery shops (108 where advice was given) and 34 file reviews.
• Suitability: 59% of shops and files ended in a suitable recommendation, and 3% were demonstrably unsuitable. In 38% suitability could not be determined, because many firms had not taken reasonable steps to obtain enough relevant information.
• Understanding: many customers understood the mortgage they had been recommended poorly, and could not explain why it was suitable for their needs.
• The letters: in the cases the FCA saw, written explanations were poor. They relied heavily on scripted text or generic comments, some irrelevant and some about things that had not been discussed. Letters were not tailored, so customers felt they added little value (paragraph 7.9).
• Oversight: firms' checks focused on whether the fact find and the customer letter had been completed correctly, which carries a risk when firms lean on those documents to assure themselves the advice was suitable (paragraph 8.5).
• Probing: advice was more clearly suitable where advisers challenged or probed, instead of letting an initial preference such as a fixed rate decide the outcome (paragraphs 4.15 to 4.18).

A report that reads the same on every case is what the FCA criticised.

The 2020 equity release review made a similar point about length. It found letters of 20 pages or more with a lot of standard text, which risks the important advice not being picked up by the customer, and it reminded firms of Principle 7, which requires communications to be clear, fair and not misleading. Its later reviews, of lifetime mortgages in 2023 and second charge mortgages in 2026, stress records that evidence why the advice was suitable and that document the key discussions.

What a good report contains

Many reports follow six sections. This layout is common practice, not an FCA template, and MCOB does not prescribe one. What counts is that each section answers the question beneath it for this client.

Section	What it answers	Draws on
Client profile	Who the client is and the circumstances that matter to this advice: household, employment and income, commitments, anything likely to change	MCOB 4.7A.4G(1), 4.7A.19R
Mortgage requirements	What they want from the mortgage and why: purpose, term, how long they expect to keep it, the features that matter, and any preference you tested	MCOB 4.7A.6R, TR15/9 paragraphs 4.15 to 4.18
Affordability	Why you concluded the payments are affordable, and what you assumed about rate changes	The income and commitments on the fact find, MCOB 4.7A.6R
Recommendation rationale	Why this contract rather than the others that could suit, and why not the cheapest if it is not	MCOB 4.7A.5R, 4.7A.23A R
Risks disclosed	The risks that apply to this client and were discussed: early repayment charges, what happens when the deal ends, the effect of fees added to the loan	MCOB 4.7A.6R, 4.7A.19R
Outcome	What you recommend, what the client chose, and what happens next	MCOB 4.7A.25R

Specific against generic

The examples below are invented to show the difference. The first column is the kind of wording TR15/9 criticised. The second is what the same point looks like when it comes from the file.

Section	Generic	Specific
Requirements	The mortgage meets your needs.	You told us you expect to move in about five years and want payments that will not change in that time, so we compared five-year fixed rates.
Rationale	This product was chosen for its competitive rate.	The lowest rate we found came with the highest fee. Once the fee is included, the product we recommend costs less in total over the five years.
Risks	You were made aware of the risks.	We discussed the early repayment charge of 3% in year one, which applies if you repay or move early. You told us you understood.
Rate change	The rate may change in future.	Your payments are fixed until the deal ends. After that they follow the lender's standard variable rate, and we discussed what a rise of two percentage points would do to your monthly payment.

The specific versions are only worth writing if they are true. If the early repayment charge was not discussed, the sentence has no place in the report, however sensible it sounds.

Writing it so it holds up

These are practice points, not rules.

• Write from the file notes, not from a template. If a statement is not in the notes, either it was not discussed or the notes are incomplete. Fix the notes or delete the statement.
• Use only what was discussed. TR15/9 found comments about things that had not been discussed. Delete them.
• Say who this client is. A sentence that would be true of any client adds nothing.
• Use plain language. PRIN 2A.5.7G asks for plain language with key information prominent, and PRIN 2A.5.3R asks for communications that are likely to be understood. PRIN 2A.5.8R asks you to tailor them to the customer, including any vulnerability, which the vulnerable customer policy guide covers.
• Check understanding and record the answer. PRIN 2A.5.9R covers one-to-one communications: where appropriate, tailor them and ask whether the customer understands the key information.
• Keep the report consistent with the record. The reasoning in the report is the reasoning MCOB 4.7A.25R asks you to record. If the two disagree, the file has a problem. The Consumer Duty monitoring guide covers how to review files for that.
• Date it and keep it with the case. Keep it for at least three years from the date of the advice.

How Cleera drafts the suitability note

On Solo Pro and above, Cleera drafts the six sections from the case record, the case's form responses, and the dated adviser notes and call notes on the case. Cleera drafts, flags and organises; the adviser decides.

• What the record supports is written up. Where the record is silent on a point, the draft puts an [Adviser to confirm: ...] item in its place instead of filling the gap with generic wording.
• Risks come from the notes. The draft is written to describe a risk as discussed only where an adviser note, call note or form response records it, and it names the kind of note. Where no note records a risk, the draft asks the adviser to confirm which risks were discussed.
• Every section is editable while the note is a draft, and the note records who last edited it and when.
• Finalising has conditions. A note can be finalised once no [Adviser to confirm] items remain, there are no empty sections, and the adviser confirms that they have reviewed every section. That confirmation is the adviser's declaration, and the review itself is still theirs to do.
• Finalising locks the note. It produces a PDF, adds a timeline entry, and records who finalised it and when in the audit trail.
• Signing follows. The finalised note can be sent for e-signature, and the signed copy is filed on the case.

Protection cases get their own note, with the requirements section headed "Protection Requirements", because protection advice falls under ICOBS rather than MCOB. The protection adviser guide covers those rules. Features lists the rest of the AI tools, and the mortgage CRM page shows the case view. For the data protection questions, see AI for mortgage brokers: using it safely.

Where the rules are heading

As at 16 October 2026, the FCA's mortgage rule review page lists CP26/18, a consultation on targeted changes to the mortgage rules, including interest-only and retirement interest-only lending. The page lists no final policy statement for it. The consultation proposes amending MCOB 4.7A.23A, which is the rule behind the explanation for not recommending the cheapest suitable contract, so check the current Handbook text for that rule in particular, and before relying on any summary of a rule here, including this one.

Key takeaways

• MCOB 4.7A requires suitable advice, certain explanations, and a record of why the advice is suitable.
• The FCA's 2015 review found reports that relied on scripted text, generic comments, and statements about things that had not been discussed.
• Write each section from the file notes, and delete anything that was not discussed.
• Three years from the date of the advice is the minimum for the record, not a retention policy.
• Where you recommend a contract that is not the cheapest suitable one, MCOB 4.7A.23A R requires you to explain why and record it.
• A written report is not mandatory as such, but your network or lender may ask for one. Check what they expect.

Sources

• FCA Handbook, MCOB 4.7A: advising on a regulated mortgage contract
• FCA Handbook, MCOB 4A.2: explanations
• FCA Handbook, PRIN 2A.5: communications
• FCA, The equity release sales and advice process: key findings (June 2020)
• FCA thematic review TR15/9, Embedding the Mortgage Market Review: Advice and Distribution (July 2015)
• FCA mortgage rule review