‘Mortgage prisoners’ are homeowners who are trapped on an expensive mortgage and are unable to get a cheaper deal with other lenders because they don’t meet current, stricter, borrowing criteria – even though they’d often be paying less if they switched.

Mortgage prisoners, help for mortgage prisoners, FCA approved advisers for mortgage prisoners.

People who took out mortgages before the EU’s Mortgage Credit Directive came into effect in 2015 may be subject to high charges to move from their existing lender to a new lender (who might offer a lower cost mortgage product), which prohibits them to change to a new lender.

The financial regulator, The Financial Conduct Authority (FCA), has removed some barriers that stop mortgage prisoners from finding a cheaper deal – though many will still be left trapped.
Currently, anyone applying for a mortgage is subject to strict affordability checks, but the FCA says that lenders can now relax these affordability checks for new customers who meet certain criteria, such as being up-to-date with payments under their existing mortgage for at least 12 months, and not looking to move house or borrow more. i.e. a re-mortgage on your existing property.
This means some mortgage prisoners will now be able to switch to a new lender more easily. Previously, only a mortgage holder’s existing lender would have been able to relax the strict affordability rules.
The FCA also says that customers of inactive lenders and firms no longer authorised for mortgage lending will have to be contacted, and told that it has become simpler and easier for them to switch to another lender. These lenders include Northern Rock and Bradford & Bingley.

FCA statement
Christopher Woolard, executive director of strategy and competition at the FCA, said: “Responsible lending is hugely important, and unaffordable borrowing is a cause of significant harm. Mortgage prisoners are often stuck on more expensive mortgages. We are removing barriers to switching in our rules and we would like to see firms make changes to their own processes quickly in order that customers can benefit as soon as possible.
“We are also taking steps to help those who have mortgages with inactive lenders or unregulated entities to ensure that they are aware that they may now be able to switch and save money.”

What we can do to help you
The FCA has asked us to assist ‘mortgage prisoners’ and we are happy to do so. As independent, whole of market, mortgage advisers, we have access to all UK lenders. We are able to assess your current situation and compare your requirements to new mortgage lenders who could offer a lower cost mortgage product. Our advice is fees free (although a fee may be charged if we proceed to arrange a new mortgage for you).

Contact us now

Our fully qualified mortgage advisers would be happy to hear from you. Wherever you are in the UK, we have someone able to assist you. Simply select your preferred adviser from the list on our ‘contact us’ page.