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SVR caps proposed to help mortgage prisoners

Mortgage prisoners who are stuck with a closed book mortgage lender could have their payments lowered following action from the House of Lords.

Lord Stevenson has tabled an amendment to the Financial Services Bill 2019-21 which would change the standard variable rate of interest that mortgage prisoners pay in closed books to 2% above the Bank of England base rate.

Prior to the debate the UK Mortgage Prisoner Action Group reiterated calls for SVR caps.

In a report called Setting the Record Straight, the group said capping the SVR in closed books will provide tangible immediate relief to hundreds of thousands of mortgage prisoners.

According the group, mortgage prisoners have paid an average of 1.33% above the typical market SVR for over a decade.

The UK Mortgage Prisoner Action Group also called for government-backed mortgage product specifically designed for mortgage prisoners, to help them remortgage to the mainstream market.

An amendment has also been tabled by Lord Holmes which would ban the sale of mortgage books to unauthorised entities.