HOMEOWNER Sharon Gray fears she’ll be trapped paying extortionate mortgage rates for another decade thanks to yesterday’s interest rate decision. The 45-year-old, who lives in London, is one of the thousands of mortgage prisoners unable to switch to a cheaper deal, due to new lending rules make her seem like a much riskier customer to banks. Yesterday, the writer had even more bad news as the Bank of England announced an increase in the bank rate from 0.50 per cent to 0.75 per cent. When Sharon first took out a mortgage for a one-bedroom garden flat 14 years ago, she sensibly opted for a five-year fixed rate deal.But then, when the introductory period came to an end she was bumped onto an expensive standard variable rate tariff. Then in 2014, lending rules for banks and mortgage providers were tightened. What is a mortgage prisoner?HOMEOWNERS who cannot switch mortgages to a better deal are called ‘mortgage prisoners’.This affects customers who took out a mortgage before 2014 where they were subject to a different round of affordability checks. Now, they can’t switch deals to another lender because they no longer pass the new checks, even if their circumstances haven’t changed. So, as… Read full this story
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