'I took out a mortgage 17 years ago and owe £15,000 more than I borrowed'

Amanda Wilson is one of around 200,000 'mortgage prisoners' stuck on sky-high rates through no fault of her own.

Amanda Wilson Northern Rock
Amanda Wilson took out an interest-only mortgage with Northern Rock in May 2007, as advised by a broker. (Amanda Wilson/Reuters)

A mother-of-three who took out a £335,000 mortgage in 2007 says she currently owes nearly £15,000 more than she borrowed, despite keeping up with her payments.

Amanda Wilson, 59, is one of around 200,000 so-called "mortgage prisoners", who were prevented from switching providers or applying for more favourable rates due to the fallout of the 2007 financial crisis.

When she bought her home with the now-collapsed Northern Rock in May 2007, she followed her brokers' advice and put down a 15% deposit for the home in Redhill, Surrey, valued at £395,000 at the time, leaving her with a mortgage of £335,750.

It was an interest-only mortgage, at a rate of 5.2%, but Amanda says the general consensus at the time was that rates were going to come down.

Sure enough, they did, with the Bank of England base rate falling to 3% in November 2008, and 0.5% in 2017. However, as a mortgage prisoner, Amanda had no way to take advantage of this and now finds herself in more even more debt.

Her and so many others' struggles are beginning to gain more attention, with MP Martin Docherty-Hughes introducing a new bill in an attempt to change the rules for these borrowers, but many in the UK Mortgage Prisoners campaign group feel the government has been reluctant to act.

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After the 2008 financial crash, rules on borrowing were tightened up, and many of those who took out a mortgage pre-crisis found they couldn't pass affordability checks when trying to switch to a cheaper deal.

Many loans, including Wilson's debt to Northern Rock, were sold by the state to "closed book" inactive lenders – investment firms that aren't regulated to lend new mortgages – leaving many homeowners stuck with uncompetitive rates.

At a time when the base rate was reaching historic lows, the lowest Wilson's rate ever went was 4.04%, and she says she's had 14 rate rises, the last of which, in August 2023, took her up to 9.29%.

Amanda's payments went up from £1,200 per month to £2,700 per month in just over a year and a half. "The mortgage has just gone up and up and up," she said. "It was incredibly hard keeping up with the increases. I just don’t have the ability to pay extra."

The self-employed beauty therapist also took a six-month payment holiday when she was left unable to work due to the COVID-19 pandemic, and over the Christmas period between 2010 and 2011, which was the last chance she had to have a holiday with her family.

"It's been 17 years – all I've really done is work to pay the mortgage," she added.

Amanda Wilson - Mortgage prisoner
Amanda Wilson feels her children missed out on a lot of experiences growing up as she stressed over repayments. (Amanda Wilson)

'All I wanted was something to leave my children'

"I feel guilty. It's almost as if the last 15 years have kind of gone in a flash. My kids are all grown up and we didn't do stuff together that normal families do. Even when we were together, the whole time I was very, very stressed and worried about money.

"Sometimes, looking back on it, I think, 'why didn't I just sell the house?' But I don't want to sell it, I bought it because I love the house and wanted it to be our family home. I wanted it to be somewhere where the kids could come back with their kids and stay for the weekend."

Wilson, who has been working less recently due to health reasons, says her 27-year-old daughter is paying rent to help with the repayments, and she feels like she is "burdening" her youngest.

"I've actually got a fair bit of equity, but it's not enough to buy another house, or even a flat, and I can't get another mortgage because my circumstances have changed and I will fail the affordability.

"Eventually I will have to sell and go into rented accommodation. All I really wanted was something to leave my children and not going to have anything to leave them, and this is the situation so many mortgage prisoners are in."

Mortgage prisoners 'left in purgatory'

MP Docherty-Hughes says there has been a lack of interest on this issue by both the Conservative government and the Labour Party.

The SNP representative for West Dunbartonshire could have ended up a mortgage prisoner himself, having been a Northern Rock mortgage holder, but was fortunate enough to be able to transfer.

"What we find are people who took, like me, an A-rated mortgage which had been signed off by the FCA [Financial Conduct Authority], signed off effectively by the Treasury, and they find themselves so many years later nowhere near paying it off," he tells Yahoo News.

Martin Docherty-Hughes MP, Scottish National Party (SNP) Member of Parliament for West Dunbartonshire, Scotland, outside the Houses of Parliament
Martin Docherty-Hughes is trying to change the law to help mortgage prisoners. (Alamy)

Earlier this month, Docherty-Hughes introduced a Ten Minute Rule Bill in Parliament to save mortgage prisoners from eviction, and to “lighten the burden they have carried over the years”.

It passed its first reading with no objections on 12 March, and is set to have a second reading in the Commons on 14 June

"The vast majority of mortgage prisoners found themselves in a situation where they will not own their homes, even though they are paying over the odds for it... They are literally being left in purgatory," Docherty-Hughes added.

"Nobody in parliament – both in government and the official opposition – seems to want to do anything about it. This isn't just about the present government, this goes back to Gordon Brown and the Labour Party. Labour would have to realise that it was them who set this ball rolling. They pushed the New Labour narrative and set in motion the chain of events that led to this."

Even an all-party parliamentary group for mortgage prisoners has failed to make any substantial progress, Docherty-Hughes added.

The MP urged anyone affected by this issue to get in touch with the UK Mortgage Prisoners campaign group and to ask for advice on lobbying their MPs.

A HM Treasury spokesperson said: "The government understands the difficulties faced by borrowers who were not able to switch to a new mortgage deal. We have updated mortgage lending rules, removing the barrier that prevented some mortgage prisoners from being able to switch, and introduced significant financial and legal protections for those most in difficulty.

“We continue to work with the Financial Conduct Authority and the sector on this issue and will carefully consider practical and proportionate solutions put forward.”