A crowdfunding page was set up on 14 August with a target fund raise of £25,000 to pay for the legal costs in setting up and registering the charity with the Charity Commission.
So far, more than £2,000 has been raised from campaign group members facing financial hardship.
The group’s aim in setting up the charity is to prevent homelessness and poverty among borrowers trapped on unaffordable mortgage deals and to provide them with support, guidance and advice.
Lead campaigner Rachel Neale said: “The crowdfund is a result of collective resourcefulness and a desire to achieve a positive outcome in the absence of meaningful help from either the regulator, the UK government, or the industry.
“The fact that victims and their families and friends are willing to put their own money behind this is a measure of how urgent the situation has become and how helpless mortgage prisoners feel. There are costs to organised campaign and charitable work.
“We and other campaigners anticipate this work will need to continue for many months, if not years, unless there is sudden action from the government. A charity structure enables funding and structure for such long-term campaign work.”