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Rishi Sunak to protect ‘Mortgage Prisoners’?

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Speaking on the “Martin Lewis Money Show” last night, Rishi Sunak promised to protect ‘mortgage prisoners’ who can’t cope with the financial strain with the on-going pandemic.

Mortgage Prisoner Escape Plan!

With the new Mortgage Guarantee scheme aimed to help ‘ First-Time Buyers’ get onto the property ladder , the Money Expert host, Martin Lewis urged the government to create a similar scheme to protect ‘Mortgage Prisoners’ who are stuck in plans that they can’t afford .  

He brought up the question on his show last night, as he recently funded research into the issue, after hearing people have become suicidal because of the financial strain.

What is a Mortgage Prisoner?

Mortgage prisoners are those who took a mortgage out to buy a home before 2014, and are now unable to find a more affordable deal because of rules changing following the financial crash .

However, after the rules changed there was stricter borrowing criteria, and if the consumer doesn’t meet them then they are stuck overpaying . So, this means that in some instances people are unable to change from their current mortgage – even if they are up to date with payments, and the alternative mortgage is much cheaper .

The Budget Talk

On Wednesday afternoon, Rishi Sunak announced his budget, which introduces a new 95% Mortgage for First-Time Buyers, guaranteed by the Government. However, that leaves some questions unanswered by a majority of the public – why couldn’t the Government do the same with those stuck as Mortgage Prisoners?  

Rishi Sunak had this to say:

I think the study said half of those are able to switch, around 125,000 but you're right, we still need to make sure that we have workable solutions for everybody and I know we are working with the LSE and others.

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