Tens of thousands of “mortgage prisoners”, many of whom were former customers of collapsed lenders such as Northern Rock, will finally be able to move deals under reforms proposed by the financial regulator on Tuesday.
The Financial Conduct Authority said lenders would be allowed to loosen affordability requirements when customers who are up to date with their repayments apply for remortgages without borrowing any more money.
The watchdog estimated last year that about 140,000 borrowers were unable to switch to cheaper fixed-term deals because of stricter affordability rules that came into force after they took out their loans.
