The FCA has adopted new measures to support closed book and interest-only/ part-and-part mortgage borrowers, some of whom may be mortgage prisoners.
The measures are:
- a new rule that will make it easier for lenders to offer switching options to consumer who are in a closed book within the same financial group. This would mirror the flexibility that active lenders already have when their existing customers wish to switch; and
- guidance stating that firms should allow borrowers to delay repayment of the capital at maturity on interest-only and part-and-part mortgages up to 31 October 2021, provided borrowers are up to date with payments and that they continue to make interest payments.
The new rule took effect on 23 October 2020 and the guidance will come into force from 31 October 2020.