NatWest has launched modified affordability assessments under the FCA’s guidelines to support mortgage prisoners.
The lender has emailed selected brokers to let them know it has launched a dedicated Mortgage Prisoner Hub, which is only accessible to advisers who have been selected by the regulator to support trapped borrowers.
The email says: “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 unregulated lenders.
“The FCA has identified these customers as ‘mortgage prisoners’.
“To help these borrowers the FCA has updated affordability requirements to allow us to include a borrower’s track record of making mortgage payments as part of a proportionate affordability assessment.
“At NatWest Intermediary Solutions we’re proud to be helping customers and communities succeed by working with FCA selected brokers, of which you are one, in order to support Mortgage Prisoners.
It adds: “For clients identified as mortgage prisoners we will apply a more suitable and proportionate method to assess affordability.
“We will only be accepting applications for FCA identified mortgage prisoners, who have been contacted directly by their existing lender and have the appropriate letter confirming this.
“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 of unsecured loans linked to the mortgage).”
The lender asks advisers to initially assess mortgage prisoners using its standard remortgage calculator, so that it can offer additional borrowing or consolidation of debts to those who meet its mainstream affordability requirements.
For those who don’t meet this test, NatWest has created a mortgage prisoner calculator to help brokers understand if their client is likely to pass the modified affordability assessment.
When submitting a mortgage prisoner application, brokers are asked to select the option “this customer is a mortgage prisoner” to enable the case to be correctly processed.
Advisers must include the customer’s mortgage prisoner letter from their current lender in addition to standard remortgage packaging.
If this is not included the application cannot go through the modified affordability assessment.