The All-Party Parliamentary Group (APPG) on Mortgage Prisoners,  co-chaired by Seema Malhotra, has suggested capping lenders’ standard variable rates (SVRs) as a way to help.

A mortgage prisoner is a homeowner who can’t get a lower interest rate through remortgaging. This is a huge problem for those whose rates have risen to a level they can no longer afford.

The Financial Conduct Authority (FCA) estimates there are 200,000 mortgage prisoners in the UK.

They’re often customers of inactive lenders – sometimes called ‘zombie banks’ – that bought or were given existing mortgage loans from banks such as Northern Rock, which collapsed in the 2008 financial crisis.

These people are ‘prisoners’ because stricter affordability checks introduced in 2014 mean they can’t go and get a mortgage from a different bank or building society.

Seema Malhotra said: ‘Too many mortgage prisoners have been exploited by being held on high standard variable rates or have seen their rate increased with no justification.

‘The CMA and the FCA should intervene quickly to cap the interest rates being charged. The coronavirus has led to unprecedented strain on family finances and we need to help mortgage prisoners, including many key workers, get a better deal.’

These suggestions have been profiled by Which? magazine.

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