The financial press reported this weekend on plans by the Financial Conduct Authority (FCA) to change affordability rules for ‘mortgage prisoners’.
Around 150,000 customers are thought to be stuck on higher Standard Variable Rates and unable to switch to a cheaper deal, due to stricter lending rules introduced in 2014. The FCA is now considering a change, which will allow borrowers looking for a like-for-like remortgage to switch to a new mortgage costing less than the existing one.
The plans have been widely welcomed, and the FCA says full proposals are due to be published in the spring.
In separate research, the FCA has also revealed that more than a third of mortgages now last beyond 30 years. Around 40% of borrowers will be over the age of 65 when this debt matures, and experts in the Daily Mail highlighted the need for homeowners to be mindful of a potential dip in income post-retirement.
A number of lenders have extended their age limits, or introduced more flexible products to accommodate changes to the way we live and work, but it is also advisable to review your mortgage regularly to consider whether you can overpay or reduce the term gradually to repay the debt earlier.
What the papers said about mortgage prisoners and lengthy terms