Shelter Scotland says it is pleased at new FSA rules which pledge to put "common sense" at the heart of the mortgage market.
It is thought the legislation will prevent future borrowers ending up with a mortgage they cannot afford.
Shared equity buyers who are getting extra loans secured against their property along with a mortgage will now be required to demonstrate they can afford both sets of repayment.
Lenders will also be required to ensure customers receive ample mortgage advice.
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Graeme Brown, Director of Shelter Scotland, said: "At Shelter Scotland, we see the dire consequences suffered by people who took on more debt than they could possibly manage during the last housing boom.
"Hopefully, these new rules will ensure that we do not return to the 2007 mortgage market which caused so much damage and will promote responsible lending."
Martin Wheatley, managing director of the FSA and CEO-designate of the Financial Conduct Authority (FCA), said: "We recognise that many lenders are now using a far more sensible set of lending criteria than before, but it is important that these common sense principles are hard-wired into the system to protect borrowers.
"We want borrowers to feel confident that poor practices of the past, which led to hardship and anxiety, are not repeated. At the heart of the new measures is an affordability test to check borrowers can meet the repayments of the mortgage they want."
Under the new guidelines, lenders will need to consider a borrower's net income and committed and basic essential expenditure. They will also have to take into account the impact that future interest rate rises may have on mortgage repayment costs.
(IT)
