By Kate Brown
Long-standing mortgage borrowers who have been unable to switch to a better deal, also known as “mortgage prisoners”, should be given more help according to the Financial Conduct Authority (FCA).
Director of strategy and competition at the FCA, Christopher Woolard, commented: “There are a number of long-standing borrowers that have kept up-to-date with their mortgage repayments but are unable to get a new mortgage deal; we want to explore ways that we, and the industry, can help them”.
Some “mortgage prisoners” found themselves trapped in their current deal when stricter affordability checks were brought in during 2014 on mortgage applications. Customers were unable to switch to a better deal when their existing mortgage returned to the more expensive standard variable rate, even if they could afford the payments.
The FCA also said that they want to make it easier for people to find the best mortgage, as figures from an interim report into the mortgage market revealed that around 30% of buyers fail to find the cheapest deal at the moment.