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Mortgages prisoners are borrowers that are up to date with their mortgage payments but who are unable to switch mortgage providers because they have a mortgage loan or borrower characteristics that are outside of current lender appetites.
Many people are in this situation because of changes to lending practices during, and immediately after, the 2008 financial crisis. Most have mortgages with inactive lenders who do not provide new mortgage products.
The Mortgage Prisoner Review published by the FCA provided a detailed analysis of consumers who are unable to switch lender. It identified 195,000 mortgage accounts with closed book lenders where the borrowers could potentially benefit by moving to an active lender. Out of these the FCA identified a cohort of 47,000 mortgage prisoners who are up to date with mortgage payments but who cannot readily switch providers. UK Finance is currently working with a range or organisations, and lenders, to identify ways these borrowers could be helped to obtain a better mortgage product.
We will continue to engage with the FCA and HM Treasury on support for mortgage prisoners and approaches they might be able to take to encourage customers to consider products with active lenders. We will work with all the stakeholders involved in the processes including third-party administrators, closed book lenders, the debt advice sector, and mortgage intermediaries
Mortgages
Mortgage lenders have expressed concerns about the levels of knowledge among mortgage advisers about the later life lending market. Register your interest for our Later Life Lenders programme to help address issues relating to adviser knowledge and their ability to communicate options.
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