Industry should be ready to help mortgage prisoners, warns Chair
26 March 2019
Mortgage prisoners are those that are unable to remortgage or switch to a cheaper mortgage rate due to changes in legislation following the financial crash.
After pressure from the Treasury Committee to act, the Financial Conduct Authority has today announced a package of remedies to help mortgage prisoners.
Commenting on the announcement, Rt Hon. Nicky Morgan MP, Chair of the Treasury Committee, said:
“Thousands of customers are trapped on a far higher interest rate than is necessary through no fault of their own. Following constant pressure from the Treasury Committee, this confirmation of the FCA's decision to act is welcome.
“The FCA's proposals should make it easier for some mortgage prisoners to switch to new providers.
“But the FCA's rules apparently aren't expected until towards the end of the year. For some families, this may be too late. Speed is of the essence in this case, and every month will count.
“This will not be a panacea for those ‘mortgage prisoners' who are in arrears, or are regarded as ‘risky' for other reasons. Some of those may have been pushed into arrears due to the high rates they pay. That may require more thought by government.
“Lending is a commercial decision so the FCA cannot force firms to lend to these mortgage prisoners. But once the regulator's new rules have come into force, industry should be ready to step up to help those borrowers that meet their risk profile.”
Image: House of Lords