It’s estimated thousands of homeowners are trapped by their mortgage lenders refusal to transfer loans to a new property. Their alternative is to rearrange the new loan with a different lender, but this may run the risk of incurring early repayment penalties. While all borrowers should be fully aware of early repayment penalties on their mortgages, many will have thought they could simply transfer the mortgage to another property. However the terms for doing so are frequently quite ambiguous, and unfortunately lenders criteria has changed considerably over the last couple of years. A common problem faced by borrowers with interest only repayments is that they can now be asked to prove that they can afford a full repayment mortgage.

Some borrowers have taken out cheap lifetime tracker loans, and experts are becoming suspicious that lenders would prefer to have this money paid back as they know they can lend it out at a higher interest rate. Anyone who has come across this problem can complain to the Financial Ombudsman Service, and apparently they are now receiving around 650 complaints each month. They can at least find out the reason why the lender has refused to transfer the loan and if the complaint is upheld they will work with the lender to try and resolve the issue. The regulator is in the process of finalising its mortgage market review which will hopefully help those borrowers with a good record of payments to move their mortgage with them. However until this happens the only course of redress at the moment is to contact the FOS.