“Urgent action” needed to help mortgage prisoners after latest interest rate hike | personal finance | finance

Mortgage prisoners trapped in agreements with current lenders will struggle to make repayments after today's Bank of England interest rate rise, campaigners have warned. The Bank of England (BOE) today raised interest rates for the tenth consecutive day, from 3.5 percent to 4 percent, a decision that will cause many people's mortgages to become more expensive.

About a quarter of a million (250.000) UK homeowners are stuck with their mortgage business because their administrators have become inactive or cannot authorize new products.

Many took out their loans with lenders that had to be bailed out during the financial crisis, such as Northern Rock and Bradford& Bingley – some have since sold their mortgages on to another provider.

Now campaigners are calling on the government to step in before more people lose their homes.

They have been emphasizing the problem of mortgage prisoners for years and say that the situation is worsening.

A spokesman for the UK Mortgage Prisoners Group said, "We can see the catastrophic impact of an increase in the 10. Prime rate on their members, who are suffering unbearable stress in the face of prohibitively high payments levied by profit-hungry vulture funds, do not stress enough.

"The majority of borrowers in the active market are understandably very concerned about moving from low fixed rates to other fixed rates of around 5 percent.

"Interest rates around 5 percent, however, were where British mortgage prisoners were trapped and rescued for nearly 15 years after the sell-off of our mortgages from Northern Rock and other banks that failed in the global financial crisis of 2007-8 government that allowed non-lenders such as the infamous Cerberus to buy our mortgages and not offer any other products or interest rates."

Mortgage borrowers could face average interest rates of 8.14 percent following today's announcement that the Bank of England is raising interest rates further, the campaign group warned.

The spokesman added, "Mortgage Prisoner's mortgage servicers trapped our members with these high variable rates during a decade of historically low interest rates that we couldn't benefit from.

"As prime rates have risen over the past year, these increases have been passed on to mortgage holders, and the result is that following today's announcement, our average interest rate will be an unsustainable 8.14 percent.

"British mortgage prisoners who took out their mortgages before the strict post-crash overhaul of lending rules and were told for a decade they couldn't afford to pay less" have been landed with payments well above so-called affordability levels. Without leniency."

In addition, activists said there has been a "deafening silence" from the FCA about helping mortgage prisoners, and some may now face having to sell or expropriate their homes.

More than 750.000 households are at risk of mortgage default following today's announcement that the prime rate has risen to four percent today, according to the Financial Conduct Authority (FCA).

Today's rise – an increase of 0.5 percent – takes Bank of England interest rates to their highest level since the 2008 financial crisis.

After the increase, the average mortgage borrower can expect to pay an extra £52 per month.