EU Mortgage Credit Directive

The Mortgage Credit Directive (MCD) introduces an EU-wide framework of conduct rules for mortgage activities. It creates minimum regulatory requirements that all member states must comply with to provide consistency in protecting consumers taking out credit agreements for residential property.

Our changes for the EU MCD will take effect from Monday 22 February 2016. This page will provide you with a summary of how Nationwide intend to meet these new requirements and our approach to pipeline cases.

Full details of the new legislation can be found on the Financial Conduct Authority (FCA) website.

Sales Process

The MCD requires lenders to provide the customer with a binding offer and a reflection period.

Nationwide will consider an Offer to be binding on us from the date it's issued and the customer’s acceptance to the Mortgage Conditions will be from when the funds are drawn down.

Our reflection period will last for 9 days (allowing for 2 days postage) and this will begin from the date the Offer is produced. A customer can choose to waive the reflection period by contacting Nationwide or, where appropriate, by their solicitor returning the Certificate of Title.

Product disclosure (KFI/ESIS)

Nationwide will continue to issue a Key Facts Illustration (KFI) document and will include the additional MCD disclosures in the relevant sections, rather than in a separate document.

The European Standard Information Sheet (ESIS) will replace the existing KFI document and lenders must begin using the ESIS by 21 March 2019. As part of MCD, lenders can continue to issue a KFI until 2019, but after 21 March 2016 it must include the following information:

  • An additional disclosure about the new reflection period,
  • The new APRC (Annual Percentage Rate of Charge) which replaces the existing APR calculation,
  • An additional APRC, where the interest rate is variable and
  • Extra information for foreign currency loans (where applicable).
Foreign Currency Loans

EU MCD will introduce changes to the way Foreign Currency Loans are defined, processed and managed.

Nationwide’s Lending Policy doesn't currently support foreign currency lending to new borrowers. We're not proposing to make any changes to our Lending Policy in this respect.


We'll be adopting the following approach to pipeline cases to minimise disruption to your clients' applications.

  • For applications started, but not submitted prior to 22 February, when you return to the application, NFI Online will prompt you to complete any new questions that have been added to the application form relevant to your client's case. It won't be necessary to produce a new KFI for your client.
  • For applications submitted prior to 22 February requiring a Material Change, please contact New Business in the usual way. In some cases, we might need to collect some additional information from you.
  • For applications submitted prior to 22 February and offered after this date, we'll include additional documentation with your client's mortgage offer detailing the changes and benefits of the EU MCD, including the Reflection Period and Binding Offer. It will also explain what the APRC and additional APRC illustrations are for.

Frequently Asked Questions

Will you be using an ESIS or KFI?

We'll be updating our KFI document to incorporate the changes required under the EU MCD.

Under what circumstances can a Binding Offer be withdrawn?

Nationwide can only withdraw a Binding Offer in limited circumstances, such as if:

  • There's a material change to financial or personal circumstances, or a change in the property value.
  • There is reason to believe we've been given false information.
  • Investigation into the property's title raises issues making it unacceptable.
Will my client be able to waive their reflection period?

Yes, we'll accept the solicitors Certificate of Title as confirmation of your clients wish to waive the reflection period.

Further questions

If you have any questions on the EU Mortgage Credit Directive, please contact your Business Development Manager.

For information on The Mortgage Works’ approach to the EU MCD, please visit the TMW website