MPs Vote Against Mortgage Prisoner Rate Cap

Published / Last Updated on 29/04/2021

An amendment in the Financial Services Bill which would have capped interest rates for mortgage prisoners i.e. borrowers trapped inside mortgage products and unable to remortgage to lower rates as lending criteria has changed, was voted against by Conservative MP’s yesterday evening in the House of Commons.

Earlier this month The House of Lords voted in favour of Amendment 8, mortgage prisoners held in inactive closed mortgage books (sold on by failed lenders such as Northern Rock, Brandford and Bingley) to frinance groups such as Heliodor, Landmark and NRAM would have benefitted from a cap to Standard Variable Rates on closed book cases.

The final vote being 355-271.

Former Northern Rock customers which were later sold by the government to so called 'vulture funds' like Cerberus are the largest group of mortgage prisoners.  Over the past 12 months many mortgage prisoners have paid £20,000 to over £150,000 more than customers of an active high-street lender.

The Financial Conduct Authority (FCA) at the end of 2019, introduced criteria to help mortgage prisoners even though their own predictions saw that only 14,000 of the 250,000 mortgage prisoners may benefit from using the reformed affordability test. 


MPs should hang their heads in shame.  The Government and the Regulator failed to 'police' lenders closely enough in the 'noughties' which then led to the credit crunch crisis of 2008/09 resulting in lenders collapsing due to toxic mortgage debt.  Borrowers are still trapped today and both the regulator and government have done very little to help in the last 13 years.  This is not just a Conservative problem though, it was under Labour that toxic lendng was allowed to grow and the the subsequent collpase.

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