Mortgage Prisoner Remortgages | Lender help

Help for Mortgage Prisoners

You may have seen me talk about Mortgage Prisoners before if you follow me on socials. If not I shall explain. A mortgage prisoner is someone who is stuck in their current rate with a lender because their personal circumstances have changed. For example, you get accepted at first for a 2% fixed interest rate for 2 years mortgage based on your circumstances at that time. So salary, affordability, etc..However, within those 2 years, your circumstances or the lender's criteria could have changed so you feel trapped to stay with them because you think no other lender will accept you. This can be a worrying thought, but help is at hand.

Halifax for example has just announced this month that they will accept remortgage applications from customers who find themselves prisoner. This is due to the Financial Conduct Authorities' new affordability assessment to help customers switch easily to better rates when it comes to remortgaging. There are some criteria that customers must be aware of before pursuing. The borrower should be able to show that their current lender is inactive and that they are a mortgage prisoner. This should be in a letter format from their current lender. It must be at their main place of residence and not on a second home as such. Halifax will be willing to lend to borrowers only based on the maximum amount of the borrower's first charge mortgage. The new monthly payments that the borrower pays must be no higher than 5% of what they already pay to their current lender as a mortgage prisoner. This is to fall in line with the FCA'S new affordability assessment.

Halifax will also be able to consider interest-only mortgages, but this is only if there is already a repayment plan in place. Unfortunately, if you are a borrower in financial difficulty they will not be able to accept you. If borrowers already have shared ownership or an equity mortgage in place, again, these will not be accepted. Any other borrowers that want to be added to this new remortgage must meet Halifax's lending criteria, as these added delegates wouldn't come under the circumstance of being a mortgage prisoner.

The FCA brought in changes last year in terms of affordability assessments to help those who are mortgage prisoners and in need. Lenders are able to apply these new rules to help borrowers who are up to date with payments, who do not want to borrow more, and who want to stay in their current property. All Mortgage admins are required now to contact anyone who may be a mortgage prisoner and advise them of their options in terms of suitable lending products available under the new affordability assessment measures. So there will be more lenders coming on board shortly that will be able to help in the same way. So as ever I shall keep you all posted on my social platforms.

Don't hesitate to contact me if you feel you could be in this position. A broker is always here to relieve the pressure from YOU the borrower.