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Boost mortgage prisoner Christmas charity coffers post rate rise

  • 22/12/2021
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Not-for-profit organisation UK Mortgage Prisoners continues to look for support following the first base rate rise in three years came in December pushing mortgage costs up at the most expensive time of year.



The charity has called on closed mortgage lenders to stop passing the rise onto potentially vulnerable customers.

A spokesperson for UK Mortgage Prisoners said: “Closed, inactive mortgage books do not cost more to service today than they did yesterday and nor will they cost more to service tomorrow. It is not a commercial decision being made by these mortgage servicers but an unfair and immoral opportunity to profiteer further from people who are already vulnerable and living in poverty and yet UK Finance and the Financial Conduct Authority do nothing to help those affected most.”

She added it is immoral of the financial industry to push interest rates even higher for customers who are already sat on inflated interest rates of 4.38 per cent and above and remain unable to remortgage away from closed book deals.

The FCA’s mortgage prisoner review suggests roughly 195,000 borrowers remain on closed or inactive lender books, however, research from Hargreaves Lansdown out this month suggested that the real number of people trapped is likely to be closer to 100,000.

The Intermediary Mortgage Lender’s Association (IMLA) executive director Kate Davies said of the review the “wide variety of circumstances” suffered by mortgage prisoners means it is not straightforward for them to switch to a new deal.

She said: “We know from the findings that of the estimated 195,000 borrowers who have mortgages in closed books, there are many different types of cases. Some may be able to switch to a new product with the right support, but others either won’t be able to do so, or the benefits of switching would not be sufficient to justify doing so. Other borrowers’ finances may be in a poor state, in which case the regulator’s rules would not allow a new lender to approve a new deal for them.”

She added that whilst the FCA report provided great analysis of the issue it “does not push us closer to a solution” for these mortgage prisoners.

The charity as a whole supports the Home Ownership Protection Enterprise (HOPE), which provides a negotiation and support service between banks and their customers with the ultimate aim of preventing home repossessions.

Funds raised by the charity go towards a hardship fund for those in immediate danger of homelessness, offer access for families unable to make payments for heating or food or with mental health support.

Donate to the UK Mortgage Prisoner fund here – and here is a link for homeowners affected by the issues in this news story.

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