On 28 October 2019, the FCA published Policy Statement 19/27: Changes to its responsible lending rules and guidance – feedback on CP19/14 and final rules (PS19/27). In PS19/27 the FCA removed barriers that prevent consumers from switching to a more affordable mortgage despite being up to date with their current mortgage payments.

On 1 May 2020, the FCA published a statement on mortgage prisoners. The FCA notes that lenders have removed a large number of products from the market for all consumers since the beginning of March. The regulator also notes that realistically, the current economic conditions mean that lenders are not yet in a position to offer new options for borrowers. The FCA’s rules require firms to write to those who may be eligible letting them know that they may be able to switch their mortgage. But given lenders inability to offer new switching options to mortgage prisoners the FCA concludes that it would be wrong to require letters to be sent to consumers at this time.

The FCA is therefore extending the window during which it expects firms to contact consumers about switching options by 3 months.

The FCA has also written to some firms to reiterate that customers on variable rate mortgages taken out before the financial crisis with higher risk characteristics must be treated fairly, and that lenders should be actively reviewing their rates. In relation to firms administering books on behalf of lenders, the FCA is reminding them of their obligation to treat customers fairly where they have discretion to set rates on behalf of the lender. Where they do not, the FCA expects them to comply with general consumer protection law including the Consumer Protection from Unfair Trading Regulations 2008