Since the collapse of Northern Rock, thousands of mortgage holders have been trapped in high-interest loans, paying far above market rates with no option to switch lenders.  These homeowners, now known as mortgage prisoners, have been punished for a crisis they didn’t cause.

Before its collapse, Northern Rock was highly profitable, making £443 million in 2007.  Yet when the financial system crumbled, the UK government bailed out the banks with over £137 billion, including £3 billion for Northern Rock.  The real victims, the mortgage holders, were left to struggle, locked into excessive rates under Landmark Mortgages, a company that offers no refinancing options.

While the banks were saved, mortgage prisoners were abandoned, condemned to a lifetime of financial strain.  This crisis highlights a glaring injustice, where institutions were rescued, but ordinary people continue to suffer.

When will the government step in to right this wrong?

Landmark Mortgages were the highest bidders for Northern Rock’s mortgage accounts following the bank’s collapse. However, Landmark Mortgages operated as a closed book lender, meaning they were never in a position to issue new mortgages on the open market. Given the excessively high interest rates they charged, it is unlikely they would have ever attracted new customers.

From the outset, Landmark Mortgages’ business model was fundamentally flawed. As customers repaid their loans, moved their mortgages to other lenders, or reached the end of their mortgage terms, the company’s revenue stream inevitably declined. This made the business unsustainable from the beginning.

Unlike traditional lenders, Landmark Mortgages is not a bank. Their interest rates were not directly tied to the Bank of England, meaning they were under no obligation to raise rates when the Bank of England increased them. Despite this, customers continued to face disproportionately high mortgage costs.

Landmark Mortgages had no ability to amend the terms of the mortgages under their control. In early 2025, they sold a portion of their mortgage book to Bloom Home Loans. However, in letters sent to customers, Bloom Home Loans confirmed they would continue charging the same high interest rates, offering no relief to affected borrowers.

Several aspects of the Government’s handling of the sale are under investigation, including whether due diligence was conducted and whether Landmark Mortgages’ business model was ever suitable for the mortgage holders affected.