Mortgage Prisoners

‘Mortgage prisoners’ are borrowers who are unable to switch their mortgage to a more competitive interest rate.

For some, this will be due to changes in their personal circumstances. But for many others, it’s because they’re tied into a mortgage with an inactive or unregulated lender*, who cannot offer them any alternative to their standard variable interest rate.

In October 2019, the Financial Conduct Authority (FCA) published changes to its mortgage responsible lending rules. The rules introduce a new scheme which encourages inactive lenders and unregulated entities to help eligible borrowers switch to a more competitive interest rate. This is achieved by using a ‘modified affordability assessment’.

Currently, the eligibility criteria is as follows. The borrower must:

  • have a current mortgage
  • be up to date with their mortgage payments
  • not want to borrow more, other than to finance any relevant product, arrangement or intermediary fee for that mortgage
  • be looking to switch to a new mortgage deal on their current property

It should be noted that these criteria may be subject to change.

If you are a ‘mortgage prisoner’ and you are eligible for the new scheme, you should be notified by your mortgage lender within 10 months of the new scheme being in place.

However, lenders will not be compelled to offer this service. Whilst an inactive lender needs to make its previous clients aware that they are eligible for the scheme, existing lenders in the current mortgage market are not obliged to offer it. Those lenders which do wish to take part in the scheme should be up and running with their offering by April 2020.

Alternatively, instead of waiting to be contacted, you may be able to access the scheme via a mortgage adviser, and you’ll be allowed to add any adviser fees to your mortgage. At Ash-Ridge we arrange mortgages for no adviser fee.

If you would like to check your eligibility, or be updated on progress and informed when lenders come on board (plus the rates they are offering) please let us know using our contact form.

*An inactive lender could be a bank which sold off its loans to another institution. Recent examples include Northern Rock and Bradford & Bingley. An unregulated lender may have provided mortgages before mortgages were regulated by the FCA, and therefore can’t offer more competitive rates as they’re not authorised to lend money. Or they may be ‘Zombie Lenders’ which have purchased a ‘book’ of mortgages from a regulated lender in order to collect the repayments, but are not lenders in themselves.


Our testimonials

Marion Ohlson

I first met Anthony Kynaston some 13 years ago, when I sought advice regarding an inheritance from my late parents. He immediately impressed me with his friendly, calm, clear and professional manner, ascertaining my individual needs. Tony has since then continued to advise, plan and manage my financial affairs. This includes advice on my Buy to Let property and pension needs. He and his colleagues are always available to assist with any queries I may have. As a result, I can relax and now enjoy my retirement, leaving the complexities of financial management in their safe hands.

Niels Iversen

Ash-Ridge has been advising me for over 25 years. I have seen a very significant increase in the value of my portfolios over the years and have been very impressed by their professionalism, attention to detail, hands on management and care. I have been thoroughly pleased with the service so far.

Richard Tonkin

Ash-Ridge has provided myself and my family with friendly, professional financial advice for many years. I find them trustworthy and reliable, and would not hesitate to recommend them.

Caroline Mullan

I have been working with Tony and Andrew at Ash-Ridge to manage my financial affairs for several turbulent years since 2007. They have supported me with a variety of significant decisions and administration relating to pensions and investments while dealing with ever-changing circumstances as I moved into retirement. I am very happy to work with them, and to recommend their services.

Geoff Vickers

Ash-Ridge have been managing my personal pension investment portfolio for two years. I can say that I am absolutely delighted with the professional way they have handled my assets offering solid and independent advice which has been prudent and reliable. Dealing with an experienced team with first class communication and speed of response when advice is required. They are a pleasure to deal with.

Abel Smith

Sophie and I just wanted to thank you again for all your help in remortgaging. As ever, the service was superb and efficient, we will of course be coming back!

Seena Mistry

We have been using Jane at Ash-Ridge for the last 10 years, which literally speaks volumes for the service we receive. Jane’s honest and straightforward approach is a key part in ensuring we get the deal that is best for us. She is swift and always keeps us updated throughout the entire process whilst allowing us sufficient time to make a final decision. Jane is a first class mortgage adviser and I would recommend her to anyone seeking mortgage or financial advice.