Mortgages: Interest Rates

(asked on 3rd June 2019) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent steps he has taken to enable mortgage customers who were trapped when their mortgages were sold to vulture funds to take advantage of lower interest rates; and if he will launch an inquiry.


Answered by
John Glen Portrait
John Glen
Paymaster General and Minister for the Cabinet Office
This question was answered on 6th June 2019

The Treasury recognises that mortgage prisoners can be in a difficult and sometimes stressful situation. However, the servicer of these mortgages must be regulated by the Financial Conduct Authority (FCA). This means that customers are protected by the FCA’s principle of Treating Customers Fairly; their Mortgage Conduct of Business rules; and customers have recourse to the Financial Ombudsman Service.

The Treasury has also worked closely with the FCA to consider how to remove the regulatory barriers that might prevent some customers from accessing better deals.

The FCA are now consulting on changes that will move the required affordability assessment from an absolute test to a relative one. This will enable lenders to more easily accept switching consumers, providing they are up-to-date with repayments and are not borrowing more.

The FCA consultation closes on 26 June 2019.

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