A lender's obligation to mortgage prisoners

We probably see at least two or three cases like this each month, and it frustrates me every time when I hear that the client has already spoken to their current lender, who has been unable to assist them.   

There are of course many reasons why a client may find themselves in this position; change of employment status, reduction from two incomes to one or even a borrower’s age are all obvious causes.

However, if the case is so overwhelming that the client would be financially better off to move from the SVR onto a lower fix, resulting in a reduced mortgage payment each month and, in some cases, if remortgaging gets the client onto a repayment mortgage from an interest free product, regardless of their circumstances, surely it could be argued that it’s the lender’s obligation to support the client.

More often than not though, in these situations existing lenders are very good at saying the ‘terms and conditions of the mortgage have changed’ rather than reviewing the circumstances on a case by case basis. It would be refreshing if instead, more lenders took a pragmatic view and provided a reduced interest rate – perhaps not as low as their ‘headline’ rates, but still significantly lower than their SVR – and allowed for overpayments without penalty for clients who find themselves otherwise trapped in an interest only mortgage.

For older borrowers, providing the income is available, either via a pension or other investment strategy, why can’t lenders review upper age limits based on individual circumstances? Perhaps that sounds like a simplistic approach, but I truly believe it doesn’t need to be any more difficult than that.

Given where we are currently in terms of the lowest rates available for over a decade, it’s perhaps not too altruistic to suggest that those who are currently mortgage prisoners, for whatever reason, deserve to benefit from being able to remortgage and, with their lender’s support, restructure their borrowing so that they are more secure and set for financial success by being able to repay their mortgage and reduce their monthly outgoings?  

For me at least, that truly is the definition of responsible lending.