The UK’s Financial Conduct Authority (FCA) has proposed amendments to make it easier for “mortgage prisoners” to switch users.

The decision is expected to affect around 150,000 mortgage prisoners, who are stuck with inactive and unauthorised firms.

These customers are unable to opt for a cheaper mortgage owing to strict affordability assessment criteria imposed after the financial meltdown.

Under the proposed rule, lenders would be allowed to loosen affordability checks for customers who are up to date with their repayments and seek better deal without further borrowing.

The move comes after a study by the watchdog which found the £1 trillion mortgage market falling short in specific ways even though working well.

Besides, FCA urged lenders to participate in innovative tools.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

According to the regulator, this will enable customers to easily identify what mortgages they are eligible for.

The regulator also proposed the incorporation of mortgage intermediaries in the Single Financial Guidance Body.

This is said to enhance customers’ choice of broker.

FCA executive director of strategy and competition Christopher Woolard said: “The market is working well for many with high levels of customer engagement and competition.

“The package of remedies we are taking forward will benefit consumers by encouraging innovation and making it easier for them to find the right mortgage.

“We are particularly concerned about consumers – who are commonly referred to as mortgage prisoners – who are currently unable to switch. That is why we are acting now to help remove potential barriers in our rules.”