The term mortgage prisoners has been bandied about quite a lot in recent months due to the Mortgage Market Review (a new set of rules for the mortgage market) which were brought in to force in April 2014. The reason the story is still making headlines is because the true ramifications of these news rules are only just starting to be felt by home-owners up and down the country.

If you live in the UK, then you may or may not be aware of the mortgage market review.  A comprehensive review of the UK mortgage market state conducted by what is now the Financial Conduct Authority (FCA) designed to ensure the sustainability of the mortgage market, the MMR led to a number of changes in the mortgage process, all of which came into effect on April 26^th.  Today, we’re going to look at the main changes made, and how they can impact your chances of getting a mortgage:

What are the main changes?

Debt in general has caused no end of grief for a large chunk of the population. Easy credit and the constant bombardment of television and internet advertising all combined over the last decade to create the perfect storm for consumers who either weren’t aware – or chose to ignore – the potential dangers lurking down the road.

Due to the lessons learned from this crisis, many people seem to have developed a mentality that all debt is bad and should be avoided at all costs.

While this fear of debt is no bad thing, it has also led some people to ask themselves ‘Should I get a mortgage?’. Should mortgage debt be placed in the same bracket as consumer debt? Or is mortgage debt acceptable debt?

Stepping onto the property ladder for the first time can be a daunting process. There is a wide range of different mortgages available and understanding which one is the most appropriate can become difficult. The good news is that both house prices and mortgage rates have fallen, whilst there has been a growth in earnings.

Those of you who regularly read our posts on Money Bulldog will know that I’ve been getting a little worried recently about the potential for mortgage rate rises by some lenders in the not too distant future. We wrote a post encouraging borrowers to take a look at the best remortgage rates around while they’re still available and have also talked in some length about the power lenders have to raise SVR’s (Standard variable rates) at their discretion. What I haven’t mentioned though is the possibility that lenders might begin to raise the interest rate payable on base rate tracker mortgages. I didn’t mention it because along with other homeowners and even many mortgage brokers, I didn’t even realise it was possible let alone legal.

For 5 years now many homeowners and landlords have been sitting pretty, paying minimal interest on base rate tracker mortgages. A large percentage of those mortgages are supposed to be lifetime trackers, tracking the Bank of England base rate for the life of the mortgage agreement. This weekend though, I came across a BBC News article that will have homeowners with tracker mortgages nervously reaching for their terms and conditions. The article in question concerns a move by the Bank of Ireland to raise the interest rate payable on base rate tracker mortgages, not just by a little but by a lot! Take a look at these figures.