The amendment was originally suggested in April 2021 and voted against by the Conservative party. It proposed that lenders should only offer mortgage prisoners loans at no more than two per cent above the base rate.
The amendment was withdrawn after the Treasury promised to discuss it with Sharkey but has been re-tabled after the talks failed to take place.
The recently re-tabled amendment will require the Financial Conduct Authority (FCA) to bring in an SVR cap so mortgage prisoners can access new fixed rate deals priced lower or equal to an interest rate specified by the regulator.
The amendment is again asking for the SVR to be no more than two per cent above the Bank of England’s base rate and to allow mortgage prisoners who meet FCA criteria to be able to access new mortgage deals or product transfers.
The house sat on 6 June and is debating on 8 and 13 June but no timeline has yet been set for discussion of this particular amendment.
Mortgage prisoners are recognised by the FCA as some 195,000 borrowers who are unable to switch to a new mortgage either with a new lender or their existing one, and hold mortgages with inactive lenders or on closed books.
The amendment also asks for the FCA to change its rules no later than six months after the bill is passed, if it is approved.
Rachel Neale, lead campaigner of UK Mortgage Prisoners, said: “The need for a solution is urgent. Borrowers who were struggling at just short of five per cent for 15 years are now sinking under unsustainable rates of nine per cent and higher. With the reluctance of the Treasury to commit to any solution for mortgage prisoners over the past two years, it is vital that the cap on the SVR is again introduced and passed in the bill.
“The cap would bring instant relief to many mortgage prisoners who are on the verge of losing their homes. It would prevent profiteering by non-lenders who offer no products, unlike borrowers in the active market, the majority of whom are able to choose fixed rates. Excuses of impact on the active market are untrue and unjust as these borrowers were sold by government to entities who don’t offer any fixed rate products available to the majority of borrowers in the active market.”
