Lenders pledge to help mortgage prisoners | moneyfacts.co.uk

Moneyfacts.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfacts.co.uk will always be from news@moneyfacts-news.co.uk. Be Scamsmart.

MONEYFACTS ARCHIVE. This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Tim Leonard

Tim Leonard

Finance Expert
Published: 01/08/2018

Up to 10,000 so-called mortgage prisoners who are stuck on their existing deal could soon be rescued by lenders who have pledged to help them switch to new products.

As part of the commitment, 59 authorised lenders, who combined account for 93% of the UK's residential mortgage market, have agreed to help existing borrowers on reversion rates who are up-to-date with repayments but, because of stricter affordability criteria, are currently ineligible to move to an alternative product provided by their lender.

Mortgage providers will be identifying and contacting eligible customers before the end of 2018, although it should be noted that the promise applies only to customers of those lenders that are able to offer alternative products to their existing borrowers. Customers do not need to take any action and will not be obliged to switch if they do not wish to.

To qualify, borrowers will need to:

  • be first charge owner-occupiers
  • be existing borrowers of an active lender
  • be on a reversion rate
  • be looking for a like-for-like mortgage
  • be up-to-date with payments
  • have a minimum remaining term of two years
  • have a minimum outstanding loan amount of £10,000
  • be able to benefit from switching.

While the announcement is great news for those who qualify, the sad fact is that a further 140,000 mortgage prisoners – 20,000 of whom are customers with inactive lenders and 120,000 who are with unregulated mortgage owners – will remain stranded.

"We expect more lenders to participate in the coming months," said Jackie Bennett, director of mortgages at UK Finance. "Furthermore, we will be working closely with the FCA and active lenders to see what might be possible for customers of inactive and unregulated lenders.

"Participating lenders will be contacting qualifying homeowners so for now, customers don't need to do anything but wait to hear from their mortgage provider."

What next?

Search for a new mortgage on our Best Buy charts


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

white spots on grey background


Moneyfacts.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy