The Government has made a U-turn on a pledge to finally free tens of thousands of so-called "mortgage prisoners".
The House of Lords had amended the Financial Services Bill to introduce an interest rate cap for 250,000 people stuck in eye-watering mortgage deals. It would also have ensured access to fixed-rate deals for some of the most vulnerable homeowners.
However MPs this week voted 355 votes to 271 to remove the amendment from the Bill - meaning they will not get the extra support.
The move followed calls for action to assist "mortgage prisoners" trapped with their current lenders, which are often inactive or not authorised to offer new products, leaving many paying higher rates than they would otherwise need to.
They are often rejected when they apply for cheaper mortgages because they do not meet toughened borrowing criteria brought in after the 2008 financial crash, even if they are keeping up with repayments.
Many of those affected were previous Northern Rock and Bradford & Bingley customers. A significant number of those affected have been paying more than 7% in interest for the past 13 years.
Are you a mortgage prisoner? Tell us your story: emma.munbodh@mirror.co.uk
Speaking in the Commons, Treasury minister John Glen said he takes the issue "extremely seriously" but added: "I am afraid that the Government cannot accept this amendment.
"We must continue to be guided by the facts and the evidence. And the FCA's (Financial Conduct Authority) analysis shows that half of the 250,000 borrowers with inactive firms meet the normal risk appetite of lenders and could therefore switch if they chose to without any Government intervention."
He later added: "Of those remaining 125,000 who cannot switch, 70,000 are in arrears and therefore many would not be able to secure a new deal even if they were in the active market.
"And these borrowers need to work with their lenders to agree an appropriate repayment plan. The remaining 55,000 who are within active lenders and are up to date with their payments but who cannot switch are paying on average only 0.4% points more than similar borrowers on reversion rates with active lenders."
Conservative MP Kevin Hollinrake (Thirsk and Malton) pressed for the Government to offer more support to people affected by the situation.
He told the debate: "(Mr Glen) has engaged across the House on a very frequent basis on this issue and I know this challenge is not of his making, it's not even this Government's making.
"But it is the government of the day's responsibility to solve this because this was a problem of a government's making, indeed a Conservative government's making - a coalition government - so we're absolutely duty bound to find a solution here."
Mr Glen, concluding the debate, confirmed he is "ready to engage" on the issue.
He added: "I will commit to continue dialogue to try and find a way forward, those are not empty words, but they reflect I think the complexity of this matter - a matter which is underpinned by half a generation of different rules and regulations.
"And before the crisis people could borrow in ways that today we would think would be totally unacceptable, indeed, is unacceptable.
"The market must provide better solutions than it can provide at the moment and I will look carefully at what we can do to ensure that happens."
