UK Finance has partnered with the Financial Conduct Authority (FCA) to help mortgage prisoners check if they are eligible for a new mortgage following the FCA’s rule change.
At the end of October, the FCA removed barriers which stopped mortgage prisoners finding a cheaper mortgage.
The authority allowed lenders to use a more proportionate affordability assessment for customers who meet certain criteria.
These may include not looking to move house and being up-to-date with payments under their existing mortgage.
A spokesperson from UK Finance, said: “Following the announcement by the FCA in October that customers of inactive lenders and firms not authorised for mortgage lending will have to be contacted, we are working with our members and other stakeholders to help third party administrators deliver this requirement.
“Industry bodies are working with the FCA in its development of sources of information to help such customers check if they could be able secure a new mortgage under the revised criteria.”
Earlier this month, Beverley Building Society launched freedom mortgages for mortgage prisoners.
The society said it will consider offering discounted mortgages from 2.99% to those who can demonstrate a positive payment track record and are looking to borrow up to 80% of their home’s value.
The products come with a £200 valuation fee, free legals and a £999 product fee which can be added to the loan.