Our mortgage prisoner proposition

Our proposition supports borrowers who may have become trapped, also referred to as a ‘mortgage prisoner’, with their existing (closed book) lender and have received a letter confirming that they are a mortgage prisoner for the following reasons:

  • the lender is no longer providing new mortgages or offering existing borrowers with an alternative rate at the end of their concessionary period; and
  • the borrower is not able to switch to a more affordable mortgage due to the way lenders assess the affordability of a mortgage.

Submitting a case

What you need to know before submitting a case

Standard policy will be applied and all applications will be subject to our standard credit score and underwriter approval for mortgage prisoner clients with the following exceptions:

  • No additional borrowing is permitted (other than any relevant fees associated with the new mortgage or to consolidate one or more secured loans)
  • Secured loans can be consolidated where they are regulated and secured on a property (either the mortgage or secured loan should be with a closed book lender)
  • Early Repayment Charges are not considered in the affordability process and cannot be considered as part of the new mortgage as it would constitute an increase in the amount to be borrowed
  • Income verification will not be required

We have provided a calculator to enable you to undertake a standalone affordability check to assess whether your client meets the above eligibility requirements for the modified affordability assessment and mortgage prisoner products.


Who is eligible?

If your client has become trapped with their existing lender and is in receipt of a letter from their lender confirming they're a mortgage prisoner, in line with the regulatory changes, we can amend the way we assess the affordability of a mortgage and offer a product range specifically developed to support mortgage applications using the modified affordability assessment provided your client:

  • Has a current mortgage (residential owner occupied only)
  • Is up to date with current mortgage payments (which includes where payments were deferred due to the impacts of COVID-19, and have not been treated as a shortfall, has no arrears or missed payments within the last 12 months on all secured borrowing that would form part of the mortgage)
  • Is looking to remortgage to a new product on their current property
  • Does not want to borrow any more money above the value of their current main residential mortgage (including any permissible fees);
  • Maximum LTV is 85%
  • Loan to be repaid by applicant's 75th birthday (70th birthday for Interest Only/Part & Part)
  • Standard residential policy applies to all qualifying modified affordability customers with the exception of specified rules defined for these customers
  • Modified affordability cannot be applied when converting a Capital & Interest loan to Interest Only

Useful tools


  Read our mortgage prisoner guide  Use modified affordability calculator



About our mortgage prisoner proposition

Our modified assessment of affordability

In line with the regulator’s new rules, our modified affordability assessment differs from our usual assessment as we are not required to fully review your client’s income and expenditure to determine whether they can afford the new mortgage payments and future mortgage payments if interest rates were to rise. We will also determine that the interest rate of a proposed new mortgage during any incentive period (or if there is no such period across the whole mortgage term), is lower than the interest rate your client is paying on their current mortgage, which is not part of our usual assessment.

We will base affordability on the new typical monthly payment under the proposed new mortgage during any incentive period (or if there is no such period across the whole mortgage term) is less than that paid by your client each month over the past 12 months on their current mortgage.


Important information

Your client will be eligible for the mortgage prisoner proposition if when comparing the affordability, the new mortgage is deemed ‘more affordable’ during any incentive period (or if there is no such period across the whole mortgage term) if:

  • The total expected cost of the proposed new mortgage, including any fees paid up front, is less than your client would have paid on the current mortgage over that period of time.
  • The typical monthly payment of the proposed new mortgage is less than your client paid in each month over the past 12 months under the current mortgage.
  • The interest rate of the proposed new mortgage is lower than the interest rate your client is paying on their current mortgage.

As a responsible lender we believe that it is important that your client considers the benefits of maintaining their current mortgage payments where their new mortgage payment is lower and understand that by doing so it would reduce the length of their mortgage and reduce the amount of interest they would pay, therefore reducing the total cost of their mortgage.