Looks like the campaign has had some affect
If I read this correctly, if you are with a vulture fund paying high interest and can show 24 months of clean credit history, you will be able to move to one of the main banks.
The funds win because they get full payment and can invest elsewhere. Customer wins because they can access far lower rates and main banks win because they have more homes for their low rate deposit book.
Should have been done months ago
Reading the press today. Much of the "newly" agreed criteria, is just publicizing essential what is the current state of play. There was no mention of anything new, or anything innovative to help a true mortgage prisoner, not to be confused with someone who because on inertia isn't bothered switching.
The customers who can tick all those box's such as:
Paying capital & interest, no CCR issue for last two years, no bounced DD's, Have clear affordability etc. etc. Even then, their application to switch is reviewed on a case by case basis in line with the individual lenders credit policy.
Customers who can meet those criteria have no issue switching!! But what about the customer who are being told they cant switch, but are showing capacity to pay. I am not talking about distressed cases where people are not paying anything or have no chance to pay anything. I am talking about mortgage customer working very hard making monthly payments, to work themselves back to par and get out of the funds.
A customer with 50K remaining balance on a now, very higher variable rate mortgage, only likely to get more expensive this month with the ECB rate meeting. Currently does not meet the minimum loan per the lending policies of most if not all of those lenders. So that customer is told they can't switch!
What about a customer who is on an ARA? They have been preforming to the terms of it. They might owe 150K, however like most Vulture fund customers. They are generally a little older and the loan was restructured to have them pay until they are in their mid 70's when rates were low. There current higher variable rate mortgage means they are now paying big monthly payments and its eating into savings or making life difficult. If they switched they could get savings. With affordability testing (plus stress testing) against the credit policy of only allowing a mortgage up until 65/70. Spreading those payments over a reduced period means that person fails affordability and then is told they don't meet the lenders policy and then told they cant switch.
The conveyancing process is so long and expensive, when customers who can switch and mange to get a lender to take them. Then go through the whole legal process and in an increasing rate environment end up with a rate higher than they had originally engaged on, which eats into any switching savings. For mortgage prisoners could they give a loan offer for a longer period? Again, just something different.
Where is the innovation? Where are the ideas? Anyone would think the banks don't want these customers!
