The consultation has been triggered by a government review which looked into arrears and repossession practices in the second charge sector.
It found that despite some examples of good practice within second charge lending there is scope to improve.
The draft guidance will focus on issues including advertising and selling techniques, contractual terms and arrears management practices.
This will work alongside existing OFT lender guidance, with responses also forming part of the organisation’s wider project on irresponsible lending.
The deadline for responding to the consultation is May 8.