A mortgage prisoner is generally defined as someone who can’t move to a cheaper mortgage because their financial circumstances have changed, which means they can’t pass a lender’s affordability requirements. The term covers a large group of people.
We quite often see mortgage prisoners who are in negative equity:
- Those trapped on interest only mortgages.
- Those who are suffering as a result of Covid-19 and have been pushed into arrears.
- Those who have dangerous cladding in their property.
- Those who took out a help-to-buy equity loan and can’t re-mortgage.
That list isn’t exhaustive and so if you have questions about your situation and want to know what you can and can’t do it’s best to speak to a broker.
Help for mortgage prisoners
If you can’t switch to a more affordable mortgage, new rules from the FCA mean lenders have more flexibility to help you switch mortgage: Moneyadviceservice.org.uk
If you think you are a mortgage prisoner the Money Advice service has created a list of brokers that are willing to try and help.
If you can’t find a local broker on that list it’s worthwhile using Unbiased.co.uk to find one and contact them.