Family stuck paying expensive mortgage after being told they ‘can’t afford’ cheaper one
Even mortgage brokers can't help Jayne Emsley, 49, and her husband Wayne, 51, from West Yorkshire, who've been stuck in their mortgage for a decade
A SELF-EMPLOYED husband and wife have been told that they "can't afford" to move to a cheaper mortgage, even though it would reduce their outgoings by £130 a month.
Jayne Emsley, 49, and her husband Wayne, 51, from Pontefract in West Yorkshire are one of the thousands of homeowners known as mortgage prisoners in the UK.
The couple, who have two children, Jessica, 24 and George, 12, are trapped paying £1,500 extra interest a year because new lending rules mean they are now seen as much riskier customers.
In the last few months the family has been told by three separate mortgage brokers that they should not apply for a new cheaper home loan because they are unlikely to be accepted.
In 2014, the lending rules for banks and mortgage providers were tightened, and now the Emsleys, who own a bespoke worktops company, would struggle to pass tougher affordability checks.
At the moment they are paying £610 a month for their four-bed semi-detached home on the outskirts of Wakefield.
What is a mortgage prisoner?
HOMEOWNERS who cannot switch mortgages to a better deal are called 'mortgage prisoners'.
This affects customers who took out a mortgage before 2014 where they were subject to a different round of affordability checks.
Now, they can't switch deals to another lender because they no longer pass the new checks, even if their circumstances haven't changed.
So, as their current deals come to an end, they're often rolled on to standard variable rates meaning that the lender can change the amount of interest they pay at any time.
These rates are often higher than intorductory, tracker or discounted fixed-rate deals.
The heart of the problem for mortgage prisoners is that they may be paying higher monthly rates even though they "can't afford" to borrow the loan from anywhere else.
City watchdog, the FCA, believe that there are 150,000 mortgage prisoners in the UK.
"It's absolutely ridiculous to be told that we can't afford £400 a month while we're paying £600 a month now," Jayne told The Sun.
"It's a catch-22 because we want to make our mortgage repayments less so we can afford them.
"But the banks say that we can't afford to borrow from them, even though it would make our repayments less and we've never missed one.
"Brokers take one look at our situation and say that we won't be accepted anywhere so they can't help us.
"We haven't actually applied directly to the banks because if the professionals reckon we will be declined then we don't want it to affect our credit score."
Are you a mortgage prisoner? Email us at [email protected] or call 0207 78 24516.
Jayne and Wayne have been stuck on a standard variable rate deal for a decade now, which they currently pay 4.39 per cent interest on.
Moving to a fixed-rate mortgage would reduced their monthly payments to around £480, according to , an online mortgage broker.
They're one of the 150,000 long-standing homeowners who are "prisoners" of poor value mortgage deals, as identified by the city watchdog, the Financial Conduct Authority, earlier this month.
In 2006, the couple took out a five year fixed-rate mortgage for £130,000 with Northern Rock 12 years ago, but two-years in, the firm went bust.
As a result, their mortgage was sold and automatically switched to a variable rate.
Overnight, their repayments soared from around £300 a month to just under £700 and the couple said it took "everything we had" to keep paying the bills.
They've repeatedly tried to move tariffs to a more competitive rate but the best their current lender - Landmark Mortgages - could do was advise them to apply a 0.25 per cent "loyalty discount".
They have a credit card as a direct result of these sky-high interest rates, and an overdraft to help with cash flow.
Despite this, they're up-to-date with their payments and always make sure they have enough to make the mortgage repayments.
There's not a lot of options out there for mortgage prisoners like Jayne - which is why the FCA is calling for more to help these customers who are trapped.
What can you do if you're a mortgage prisoner?
OPTIONS are limited for mortgage prisoners, which is the heart of the problem.
But in the meantime, we've spoken to the experts over at to find out what you can do:
Appeal a decision - If you've already been turned down by your provider then you can appeal the decision. Some lenders have a process where you can apply to have your case looked at again, but you're not guaranteed to get accepted. There are some catches, depending on the lender, such as submitting an appeal within the 30days of it being declined.
Shop around for a new lender - Customers stuck in fixed-term deals who aren't able to switch with their current lender can look for a better deal elsewhere. Be aware that you may have to pay an early exit fee and that could be more than what you would save by switching.
Seek advice from a broker - Some brokers will give free advice, because they will received a commission from the lender. Find out if it's possible for you to switch before you apply as this could have a negative affect on your credit score and any future borrowing.
Downsize - This is a last resort option for those who are rejected for mortgages because the level of income doesn't fit the amount they want to borrow. But before you make a big decision like this, consider the cost of moving, like estate agents and stamp duty, and make sure it's an affordable option.
Although downsizing would make the repayments cheaper, most homeowners can't afford to because of the high-costs associated with moving like solicitors fees and stamp duty.
But the experts reckon if she switched to a five-year fixed-rate deal with Metro Bank (4.79 per cent), over the term she could save herself £7,597.20 in interest payments alone.
Jayne added: "I feel like they've stolen off me. It's been 10 years now and I've been completely bypassed and ignored.
"Downsizing isn't an option and we can afford the current payments because we've just got used to them now.
"But we never chose this deal in the first place so why are we being punished?
"I've got another 23 years left to pay on this mortgage and a few extra hundred of pounds a month would make such a big difference.
"I've not got an interest-only mortgage, I'm not in arrears. I'm just trapped."
MORE ON MORTGAGES
Landmark Mortgages did not wish to comment.
The Sun previously reported how hospital worker Christine Kinsella - who is terminally ill - is stuck paying "stupidly" high interest rates on her mortgage instead of ticking off her bucket list.
Another family have been told by Santander that they can't buy a smaller house with a cheaper mortgage in a bid to cut down their repayments.
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