The news that a cross party group of MPs has launched an inquiry into the plight of mortgage prisoners has brought hope to many of those ordinary people trapped in their current deal.
The problem of mortgage prisoners has its roots in the global financial crash of 2008. Prior to this point lenders had a more relaxed approach to checking that customers could afford the mortgages being offered. Following the banking crisis, the Financial Conduct Authority (FCA) made these regulations much more stringent, with the aim of preventing borrowers obtaining mortgages which they couldn’t afford.
While these tougher rules have worked to prevent consumers from over-reaching themselves on their mortgage commitments, it has left many thousands in the trap of being unable to obtain a new remortgage deal – even though they might well have had no problems with their mortgage repayments and are in good standing with their lender. Being unable to move to a new deal because they cannot pass the new affordability checks leaves those affected stuck on a higher standard variable rate (SVR) paying potentially thousands more per year.
However, the good news is that last week the All-Party Parliamentary Group (APPG) on Mortgage Prisoners submitted a cross-party motion designed to begin scrutinising what can be done to assist those trapped on higher rate mortgages. It is hoped that by stepping up pressure on both the FCA and the Treasury some people in the UK can be freed from their current mortgage prisons.
If you are a mortgage prisoner the APPG is interested in hearing your story, please email them at APPGmortgageprisoners@gmail.com . If you need help to remortgage please speak to our preferred mortgage broker for advice.
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