The term ‘mortgage prisoner’ refers to borrowers who cannot switch to a better mortgage deal to reduce their outgoings, despite keeping up repayments.
In some cases, homeowners are told they “cannot afford” a cheaper deal than their cheaper monthly payments due to tough borrowing criteria.
Sunak was questioned about the situation at Prime Minister’s Questions this week after being challenged by SNP MP Martin Docherty-Hughes (West Dunbartonshire).
‘Almost 200,000 mortgage prisoners trapped’
Docherty-Hughes said: “While there has rightly been much attention paid to the Post Office-Horizon scandal, there is another shocking example of Government and private sector collusion that began under the last Labour administration and continued under the Tories.
“Almost 200,000 mortgage prisoners who borrowed with high street lenders such as Northern Rock have become trapped after the portfolio was sold off to foreign entities like Topaz Finance and Heliodor, who have been creaming off extortionate revisionary standard variable rates, essentially since 2008, leaving even those who kept up with payments in danger of having their home repossessed.”
Sunak said: “I am familiar with the situation for mortgage prisoners. It’s not an easy situation to fix overnight, but there are things being looked at as we speak.”