Mortgage Prisoner Hub

Your client must meet the eligibility criteria and be able to provide the letter confirming their mortgage prisoner status.

We have created a Mortgage Prisoner Calculator to help you understand if your client is likely to pass our proportionate affordability assessment. Clients who pass our standard affordability check can be submitted as a standard remortgage.

Mortgage Prisoner cases will fail the standard affordability assessment included in our submission process. This will produce a refer at the point of submission, however we will underwrite your client’s application in line with the proportionate affordability assessment. There is no need to amend and resubmit.

If you receive a decline at point of sale the case has not passed another element of criteria and we will be unable to assist your client.

If you receive an accept response the client has passed the standard affordability assessment and can be submitted as a standard remortgage application.

Packaging

Please provide your client's mortgage prisoner letter in addition to all standard packaging required for a remortgage application (use 'Forms and guides' link at the top of the page for packaging guide) 

Coronavirus and other policies

All current remortgage policies and processes (including covid 19 policies) apply to Mortgage Prisoner applications (link to 'Lending criteria A-Z' at the foot of the page)

Requirements

Mortgage Prisoner applications are only eligible for clients who/where:

·         Hold a current mortgage

·         Have been identified as a Mortgage Prisoner by the FCA

·         Have had their Mortgage Prisoner status confirmed in a letter from their existing lender

·         Have been given advice by a broker identified by the FCA as able to provide advice on mortgage prisoner mortgages

·         Is up to date on mortgage repayments and hasn’t had a shortfall in the last 12 months

·         Does not have any unpaid fees or charges having been applied to their existing mortgage in the last 12 months

·         Does not want to borrow additional funds other than for product/arrangement or intermediary fees

·         Is switching to a new deal on their existing property

·         The new deal is more affordable than their existing mortgage

·         The new deal is a lower total expected cost and lower interest rate over the period of the agreement that their existing mortgage

·         The typical monthly repayment under the new mortgage arrangement must be lower than the monthly repayment made in every one of the last 12 months under their existing mortgage

Clients who do not meet these criteria are not able to use a track record of making mortgage payments as part of a proportionate affordability assessment, we will be unable to progress the application.

Criteria Eligibility

As part of a Mortgage Prisoner application, we will:

·         check that the applicant is up to date with their mortgage payments

·         check that the new mortgage payments will be lower than their current monthly payments

·         apply a proportionate affordability assessment

All other standard eligibility checks, policy and processes will apply.

Mortgage Prisoner status will only apply to the pre-completion application. After the mortgage is completed the mortgage will be viewed as a standard remortgage product.

Products

All standard NatWest remortgage products that your client qualifies for are available for Mortgage Prisoners.

No additional borrowing will be available (except for finance product/arrangement fees, intermediary fees and consolidation un-secured loans linked to the mortgage)

Key points to follow:

Please initially assess Mortgage Prisoners with our standard affordability calculator. If your client passes standard affordability this means that we may be able to offer additional borrowing or consolidation of debts where appropriate to further help your client.

For Mortgage Prisoner applications which fail our standard affordability checks, we have created a Mortgage Prisoner Calculator (accessed via the link in the banner above) to help you understand if your client is likely to pass the proportionate affordability checks. Your client must pass this proportionate affordability check for you to proceed with the application.

When submitting a Mortgage Prisoner application, you must correctly answer the question “is this a mortgage prisoner application” in the online application form to allow us to process the case without delay or disruption.

Mortgage Prisoner cases will fail the standard affordability assessment included in our application submission process. This will produce a refer decision at the point of submission, we will then assess your client with a proportionate affordability assessment. There is no need to amend and resubmit.

You must include your client's Mortgage Prisoner letter from their current lender in addition to your standard packaging at outset. Failure to do so will mean that the application does not proceed to be underwritten.

What is a Mortgage Prisoner?

Due to changes in affordability requirements following the 2008 financial crisis there are an estimated 140,000 borrowers who are unable to switch to a better deal; many are paying high interest rates with closed book or un-regulated lenders. The FCA has identified these customers as ‘Mortgage Prisoners’.

Is the Mortgage Prisoner process available to all brokers?

No, the FCA have an approved list of firms that are allowed to undertake the extra steps required as part of the Mortgage Prisoner scheme. Mortgage Prisoner firms have been approved by the FCA directly to complete these extra steps. Brokers wishing to join the scheme should contact the FCA themselves to enquire.

What are linked unsecured loans?

Loans which are linked to, but not a part of the mortgage.

For example: The Together Mortgage issued by Northern Rock pre-2008 allowed customers to borrow up to 95% of the value of their home on a secured basis, and in addition take out a fixed sum unsecured loan of up to 30% of the value of the property, capped at £30,000. As these unsecured loans were part of the mortgage, we are able to re-mortgage them as part of Mortgage Prisoner applications. 

How do I Identify linked unsecured loans?

If you are consolidating a linked unsecured loan you will need to provide evidence that this is as described in the “what are linked unsecured loans” FAQ. This will require original paperwork or confirmation of the link from the customer’s current lender to be provided as part of case packaging.

Without this confirmation the application will not be able to proceed

What's the maximum LTV for consolidation?

There is no difference to our normal criteria for debt consolidation.

Why has my client received an additional letter at the point of offer?

This letter informs the customer that we have used their track record of making mortgage payments as part of a proportionate affordability assessment. 

How do Mortgage Payment Holidays and furlough affect Mortgage Prisoners?

All coronavirus, furlough and other policies apply to these applicants.

Mortgage Prisoners must evidence that they have made all required payments in the last 12 months. An agreed payment holiday is not a ‘missed’ payment.