Free the mortgage prisoners!

May 16th, 2018

Tens of thousands of home owners who took out loans before the financial crisis are trapped on lenders’ standard interest rates because of changes to rules on whether they can afford repayments. It means that even if they have been paying off their mortgages every month they may not qualify to switch to a deal which is cheaper. The Financial Conduct Authority (FCA) is to consider seeking an industry-wide agreement to approve applications from those who took mortgages out before the crisis and are up-to-date with payments. But this would only help a small fraction of the estimated 150,000 stuck in this position and for the rest it is seeking talks to find other “possible solutions”. The findings are part of an interim report by the FCA into the mortgage market which found that around 30% of customers are failing to find the cheapest mortgage for them, typically overpaying by £550 a year over the introductory period of the loan.

Source: Technical Connection