FCA urges lenders to support mortgage prisoners

The Financial Conduct Authority (FCA) has urged banks and building societies to consider changing lending criteria to help an estimated 47,000 borrowers who could benefit from a cheaper mortgage but are currently unable to move. The watchdog’s review of mortgage prisoners found that about 195,000 households have had debts sold on to inactive lenders, with it shown that a quarter of these could save money if they were allowed to switch to a new deal. The review, which looked at the position of borrowers whose loans were sold on to new lenders after the financial crisis, found that about 47% were paying an interest rate between 3% and 5%, compared to 17% of borrowers with active lenders, while 3.3% were locked into paying interest at more than 5%, compared with just 0.8% of other borrowers. 

The Guardian (29/11/2021)