Major update on mortgage prisoners as judge makes ruling in TSB case

THOUSANDS of borrowers who assertion they are ‘mortgage prisoners’ person been ruled against by a precocious tribunal judge.

The lawsuit was brought guardant by erstwhile Northern Rock owe holders who assertion TSB Bank charged them unfair involvement rates connected their “Whistletree” mortgages.

The borrowers assertion they person been stuck paying a modular adaptable complaint (SVR) 2.29% higher than TSB's ain rate, successful immoderate cases for up to 8 years.

The slope opposed the claims, and said that charging borrowers antithetic rates is simply a basal diagnostic of the owe market.

In the ruling, Judge Nicholas Thompsell said TSB has not breached the presumption of the borrowers’ owe contracts.

The case, led by borrowers' lawyer Tim Lord KC, focused connected Northern Rock customers whose mortgages were transferred to TSB aft the slope collapsed successful 2008. 

Lord argued that galore customers were incapable to power to cheaper rates oregon determination to different lender due to the fact that stricter owe rules introduced successful 2014 meant they couldn’t walk caller affordability checks. 

He claimed this near them owe prisoners, with TSB “disproportionately profiting” from the situation.

But TSB, represented by Sonia Tolaney KC, said the slope offers antithetic products to customers with varying hazard profiles, and that this was “neither astonishing nor unfair.”

In his 49-page ruling, Judge Thompsell agreed, stating that TSB was pursuing the aforesaid SVR Northern Rock had antecedently applied. 

He ruled that the rate, present called the ‘Whistletree SVR’, is simply a continuation of the archetypal complaint and that TSB was acting wrong the presumption of the owe contracts.

Following the ruling, a TSB spokesperson said: “We invited the court’s determination today, which recognises that TSB acted successful accordance with the presumption of Whistletree owe contracts.”

TSB added that much than two-thirds of affected customers had switched to a caller owe merchandise oregon settled their mortgages since 2016.

The borrowers mislaid this circular but their ineligible squad isn’t giving up. 

Matthew Patching, a spouse astatine law steadfast Harcus Parker, said: “Our clients are disappointed with the result, but are looking guardant to progressing their claims to the next stage.”

A further proceeding is expected to instrumentality spot successful the case.

What is simply a owe prisoner?

A owe captive is simply a homeowner who is incapable to power to a amended owe deal, adjacent though they are keeping up to day connected their payments. 

Mortgage prisoners are often trapped with their existing mortgage, paying much wealth than they request to. 

This is due to the fact that erstwhile an introductory owe complaint ends, the borrower typically moves connected to the lender's SVR, which is usually much costly than the erstwhile rate.

In 2021, the Financial Conduct Authority (FCA) estimated that determination were 47,000 owe prisoners successful the UK.