The Financial Conduct Authority 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 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
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.
