A padlock on a door yesterday

10,000 ‘mortgage prisoners’ to be offered cheaper mortgage deals

Mortgage lenders have committed to helping thousands of UK homeowners currently trapped in expensive mortgage deals taken out before the financial crisis.

Termed “mortgage prisoners”, they have had no possibility of switching mortgage deal to take advantage of lower rates over the past 10 years.

Despite making regular mortgage payments without default, stricter affordability tests meant that the wealth of these borrowers was no longer enough to qualify them for a mortgage. As a result, up to 150,000 homeowners found themselves unable to move to a better deal when their existing mortgage term finished and automatically switched to their lender’s more expensive standard variable rate.

According to the Financial Conduct Authority (FCA), 120,000 homeowners had mortgages held by non-regulated firms, and 30,000 with authorised mortgage lenders. Of the 30,000 borrowers with authorised lenders, about 10,000 are with lenders still actively operating in the mortgage market.

10,000 homeowners to be offered lower rate deals

It is to these 10,000 homeowners that 59 lenders, under the organisation of trade body UK Finance, have made a voluntary commitment to help find better mortgage deals. While rules set by the regulator mean that these borrowers remain blocked from searching the whole market for a better deal, they will receive a letter from their existing lender with details of lower rate mortgage deals available to them.

Lenders that have committed to the agreed common standards to help borrowers include Santander, Barclays, Natwest, Nationwide, Lloyds, RBS, Skipton and a range of building societies, in all representing 93% of the UK mortgage market. A number of these lenders already offer existing customers in this situation the opportunity to switch mortgage deals, but all have agreed to write to every qualifying borrower by the end of 2018 if they have not already done so.

Lenders will be contacting customers who:

  • are first charge owner-occupiers
  • are existing borrowers of an active lender
  • are on a reversion rate
  • are looking for a like-for-like mortgage
  • are up-to-date with payments
  • have a minimum remaining term of two years
  • have a minimum outstanding loan amount of £10,000
  • are able to benefit from switching.

What about the 140,000 remaining mortgage prisoners?

The FCA will be considering what might be possible for the 20,000 homeowners with inactive lenders and the 120,000 borrowers currently with unregulated mortgage owners who are not UK Finance, BSA or IMLA members and not authorised to offer new mortgage deals.

Jackie Bennett, director of mortgages at UK Finance, said: “We will be working closely with the FCA and active lenders to see what might be possible for customers of inactive and unregulated lenders.”

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:


Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment


Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:


+44 (0) 333 123 0320

Open from 9am-6pm GMT


+852 6699 9008

Open from 9am-6pm HKT