Intermediaries wanting to commit to this plan must inform the FCA of their intentions by August 6 but some have already expressed their support.
Gemma Harle, the Managing Director of Quilter Financial Planning, commented on the FCAs plans: “Covid-19 has had a dramatic impact on the nation’s finances, and many will find themselves struggling to make ends meet in this challenging time. But for many mortgage holders who are trapped paying over the odds, the ramifications of the last crisis are still being felt as they are unable to switch to a better deal thanks to the affordability rules introduced in the wake of the 2008 crisis.
“What the rules are effectively saying is that these borrowers cannot afford to pay less each month. This is illogical, and Quilter is ready to support these customers throughout the entire journey, to help them find a better deal or guide them to other solutions and debt advice if necessary.
“But the elephant in the room remains. The FCA’s new rules will only be effective if lenders are willing to apply the new assessment and offer a product for mortgage prisoners to allow them to switch. In the current economic environment, where many high-street banks have been forced to set aside considerable amounts of capital for impairment losses, it is unlikely they will be making the changes anytime soon.