'Our hearts sank' – mortgage prisoners' fear as thousands transferred from one inactive lender to another
Mortgage prisoners stuck paying extortionate interest rates have described their fears after it emerged their loans were being transferred to yet another inactive lender – this time with just days' notice.
More than 4,000 homeowners, many likely to be among the UK's estimated up to 200,000 'mortgage prisoners', have been told they're being transferred from Landmark Mortgages to Bloom Homeloans.
MoneySavingExpert.com (MSE) has seen a letter dated 8 February informing affected homeowners about the transfer of their mortgages and/or unsecured loans to Bloom – a newly formed, inactive lender – scheduled to take place just a week later by 17 February.
Both MSE and its founder Martin Lewis have been campaigning on behalf of mortgage prisoners for many years now. In March 2023, an MSE-commissioned report by the London School of Economics and Political Science was published, which put forward proposals for freeing mortgage prisoners – though a detailed response to this has yet to be given by the Government.
Below, we speak to two people impacted by this latest change.
'I felt physically sick reading the letter'
Malcolm Watson (pictured right), 65, from Leicestershire, who works in local government, said that on being told his mortgage was being transferred to Bloom Homeloans he was left feeling "physically sick".
He said: "I am in fear of what Bloom is going to do to our mortgage rate and of not being able to afford it. Having gotten this far with the mortgage, struggling to pay these exorbitant rates, I fear what the rate will be once we move over. There is no information out there about why our mortgage is being transferred."
Landmark Mortgages' standard variable rate is dropping to 8.64%, with effect from either 1 March or 1 April dependent on the terms and conditions of a borrower's mortgage – something Bloom Homeloans says it will honour, though it appears some may borrowers may be on slightly different rates.
MSE has previously spoken to homeowners trapped paying 8% interest on their mortgages, with some facing multiple rate hikes in a single year. They told us they "lie awake at night" and feel "petrified all the time".
As a result of being unable to switch to more competitive interest rates, many mortgage prisoners have paid £1,000s and even £10,000s more over the life of their mortgages.
Malcolm says his own situation has forced him to put off retiring and made it even more difficult for him and his wife to visit their son who emigrated to Australia eight years ago. Malcolm said: "We've just learned to accept our situation, even though it feels like a form of abuse. It's easy to get depressed, but we try to not think about it."
'Our hearts sank'
Simon Beesley (pictured right), 56, from Cwmbran, told MSE his "heart sank" when he received the news his mortgage was being transferred to Bloom Homeloans. The retail food store manager compared the situation of mortgage prisoners to those impacted by the infected blood and Post Office/Horizon scandals.
"There's just this feeling of disbelief we've been in this position for this long. The irony is if we were mortgage-free now, the extra disposable income we'd have we'd be putting back into the economy because we'd be going out, visiting places and spending. These are things that we can't do as much right now," Simon said.
He added: "The minute lenders hear you say you've had a Northern Rock mortgage they tend to switch off. You get a 'no' straight away. They say you can't afford the new mortgage."
Simon concluded: "For me, there's a ray of light at the end of the tunnel as there's a maximum of five years left to go on my mortgage. But this still feels like a long way away and anything can happen in the meantime."
Both Simon and Malcolm are members of the UK Mortgage Prisoners campaign and support group. Some of these borrowers have seen their mortgages moved multiple times between inactive lenders over the years, for example from Northern Rock to UKAR/NRAM, to Landmark Mortgages and now to Bloom Homeloans.
Moved to Bloom Homeloans? You'll keep your current interest rate – for now
Here's what we know:
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If you're on a rate linked to a standard variable rate (SVR), you'll keep your current interest rate for now. This includes a 0.25 percentage point reduction with effect from either 1 March or 1 April 2025. It's unclear what Bloom's SVR could change to in future. Bloom Homeloans told us its SVR will be set "in response to trends in the UK mortgage market," though it specified that it wouldn't be directly linked to the Bank of England's base rate.
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If you've got a base rate tracker, you'll also continue with the same rate for now. Here, the exact rates vary by customer – but again, it's unclear what may happen to them in future.
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Bloom Homeloans is changing some of the fees that previously applied. For example, it says it's removing a £40 monthly fee for going into arrears. But we don't have a full list, so make sure you check this with Bloom Homeloans.
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Any monthly direct debits will automatically be transferred across. That's unless you actively opted out of this. If you don't currently pay by direct debit, you'll be sent new payment details. Bloom Homeloans will also now send your annual statements, "work with you" if you're in arrears and respond to any general queries you might have (note that your account number will remain the same).
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Your Landmark online mortgage account is now closed. You'll need to set up a new one with Bloom Homeloans.
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You won't be offered new mortgage products by Bloom Homeloans.
Where did Bloom Homeloans come from?
Bloom Homeloans was formed in 2025 and is operated by a company called Topaz Finance Limited, which has been in existence since 2006.
Topaz Finance Limited is authorised by and registered with the UK's financial regulator, the Financial Conduct Authority. The firm already manages the accounts of some other mortgage prisoners, including Heliodor Mortgages customers. Topaz Finance is owned by Computershare Limited, a company registered in Australia.
However, we don't know why only some Landmark customers have been moved to Bloom Homeloans or whether more Landmark customers will be transferred across in future (MSE has asked Landmark whether it plans to transfer more customers).
Many mortgage prisoners have been stuck for 17 years on expensive interest rates
Mortgage prisoners are deemed to be trapped for two main reasons: because they're stuck with inactive or closed-book mortgage lenders, which don't offer any new deals to transfer to, and/or because they're unable to switch to a better deal as they don't pass strict affordability criteria testing.
Many of these borrowers have been stuck with inactive lenders since Northern Rock failed in 2008. They tend to be on their lender's SVR – the rate you revert to when a fixed or variable-rate deal comes to an end – often the only interest rate inactive lenders have.
SVRs are normally far more expensive than the most competitive fixed or variable-rate deals, with the SVR from high-street lenders around 6.5% to 7.5% currently. Though SVRs of inactive lenders tend to be even more expensive; in recent years near to 9%.
As SVRs are variable, it means the rate can go up or down any time – though typically they move in line with the Bank of England's base rate. But while a homeowner with an active lender could avoid landing on their lender's SVR by switching deals when their current one comes to an end, many mortgage prisoners can't.
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22 April 2025
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