The FCA has published a Statement on mortgage prisoners, and a Consultation Paper containing proposals designed to support some consumers within the mortgage market.
We recognise the challenges faced by mortgage prisoners and the impact of coronavirus (Covid-19). This Statement[1] presents the further analysis the FCA has done on borrowers with inactive firms, including mortgage prisoners. It sets out the actions we have already taken to help mortgage prisoners. We also outline further support for consumers who are struggling, including a new dedicated helpline created with the Money and Pensions Service.
We are also announcing a consultation on further action to support some mortgage prisoners with options, and to protect interest-only and partial capital repayment (part-and-part) customers whose mortgages have recently matured or will mature during the next 12 months, given the impact of the coronavirus pandemic.
The Consultation Paper[2] sets out in more detail our proposals to tackle potential harms that may impact borrowers affected by the coronavirus by:
- making rules that will make it easier for lenders to offer switching options to consumers who are in a closed book within the same financial group as the lender. This would mirror the flexibility that active lenders have, under our existing rules, when their existing customers wish to switch.
- issuing guidance stating that firms should allow borrowers to delay repayment of the capital at maturity on interest-only and part-and-part mortgages up to 31 October 2021, provided borrowers are up-to-date with payments and they continue to make interest payments
This consultation will close on 8 September 2020.