TSB is facing an £800m lawsuit from so-called mortgage prisoners

TSB is facing an £800m lawsuit from so-called mortgage prisoners. 

Six years ago today the lender snapped up 27,000 mortgages worth £3.3billion which had originally been handed out by Northern Rock. 

It bought those mortgages from the Government, which had been managing them since Northern Rock collapsed in the early days of the 2008 financial crisis. 

Held captive?: Six years ago TSB snapped up 27,000 mortgages worth £3.3billion which had originally been handed out by Northern Rock

But under TSB’s Whistletree brand, the former Northern Rock borrowers claim they have been locked into mortgages with ‘excessively high’ interest rates. 

Harcus Parker, the law firm which is bringing a lawsuit on behalf of the mortgage prisoners, has today lodged documents with the High Court with the aim of creating a group litigation order.

It revealed that 200 homeowners have joined the case – with each claiming around £50,000 in overpaid interest. But it thinks up to 27,000 people could ultimately join the litigation. 

TSB said it will ‘robustly defend its position’. 

It claims that since it bought the mortgages in 2016, it has allowed customers to transfer to cheaper products where they previously could not.