Last reviewed: June 2026
TL;DR- Mortgage prisoners are borrowers on standard variable rates with lenders that no longer offer new mortgages (closed-book lenders) who cannot pass current affordability tests to switch to a cheaper deal.
- Many were sold mortgages pre-2008 that would not pass today's stricter affordability criteria - not through irresponsibility but due to changed lending rules.
- FCA rule changes in 2021 allowed active lenders to use a modified affordability assessment to help some mortgage prisoners switch - but take-up has been limited.
- Organisations including the UK Mortgage Prisoners campaign group continue to advocate for further regulatory action.
Who Are Mortgage Prisoners?
The term "mortgage prisoners" refers to borrowers who are trapped on expensive standard variable rates (SVR) because: their mortgage is held by a lender that no longer offers new mortgages (a "closed-book" lender, typically one of the books bought by private equity or government during the 2008 financial crisis); and they cannot pass the affordability assessments required by active lenders to remortgage to a cheaper deal, even though they are meeting their existing payments.
The irony of the mortgage prisoner situation is that these borrowers are demonstrably able to meet their current (often much higher) SVR payments - yet the affordability rules that protect new borrowers from over-stretching prevent them from accessing a cheaper rate that would reduce their payments.
How the Problem Arose
Many mortgage prisoners took out mortgages before the 2008 financial crisis under lending criteria that would not be permitted today: high income multiples, self-certification mortgages (where income was not verified), and 100% or even higher LTV mortgages. Their lenders subsequently failed or were sold during the crisis. The mortgages were acquired by closed-book servicers (firms that manage the mortgages but offer no new lending). When the Mortgage Market Review introduced strict affordability testing in 2014, these borrowers could not pass the tests required by active lenders to remortgage, even where their actual payments were manageable.
FCA Action: The Modified Affordability Assessment
In October 2021, the FCA introduced a rule change allowing active lenders to use a modified affordability assessment specifically to help mortgage prisoners. Under the modified assessment, active lenders can consider a switch application from a mortgage prisoner if: the borrower has not missed any payments in the last 12 months; the new deal does not increase the monthly payment; the remaining term is not extended; and the borrower meets standard credit criteria. This removed the barrier of the standard income-based stress test for qualifying borrowers switching to a like-for-like or cheaper deal.
The FCA acknowledged that take-up of the modified assessment has been limited - few active lenders have specifically targeted mortgage prisoners and many borrowers remain unaware of the route. The UK Mortgage Prisoners campaign group continues to push for further action.
Options for Mortgage Prisoners
Mortgage prisoners who believe they may qualify under the modified affordability assessment should: contact a whole-of-market mortgage broker to identify which active lenders currently offer products under the modified criteria; check whether their current mortgage servicer can offer a product transfer (even closed-book servicers sometimes offer limited product switch options); and contact the UK Mortgage Prisoners campaign group for support and current information on available options.
Frequently Asked Questions
How do I know if I am a mortgage prisoner?
The key indicators are: your mortgage is with a lender that no longer offers new mortgages; you are on the SVR and have been unable to switch to a cheaper deal despite making payments; and active lenders have declined remortgage applications due to failing the affordability assessment. If this describes your situation, contacting the UK Mortgage Prisoners campaign group and a specialist broker who understands the modified affordability assessment route is the recommended first step.
Can I complain about being sold a mortgage that made me a prisoner?
Some mortgage prisoners were sold mortgages that were not suitable for their circumstances - particularly self-certified mortgages where income was inflated, or mortgages sold with inadequate explanation of the interest rate risk. The FCA and FOS have considered some individual complaints in this area. However, the general eligibility for complaint depends on the specific circumstances of the original sale and whether it constituted mis-selling under the conduct rules applicable at the time. Time limits on complaints mean that older sales may be time-barred. Citizens Advice and the FOS can advise on the viability of a specific complaint.
Is there a government scheme to help mortgage prisoners?
As of 2026, there is no specific government scheme for mortgage prisoners equivalent to, say, a rescue fund. The FCA's modified affordability assessment rule change is the primary regulatory intervention. Parliamentary inquiries and campaign groups have advocated for further action - the current position should be checked via the UK Mortgage Prisoners campaign group and relevant parliamentary committees for the latest developments.
What is a closed-book lender?
A closed-book lender is a firm that holds an existing mortgage portfolio but no longer originates new mortgages. They service the existing book (collecting payments, managing arrears) but cannot offer product transfers or new deals to their existing borrowers. Mortgage books from failed banks and building societies were frequently sold to private equity firms or wound down by UKFI (the government's bank management body) after 2008. Borrowers with mortgages held by these firms have no access to new rate deals from their current lender.
