The regulator has changed the rules so lenders will now be able to use more proportionate affordability assessments and eligible consumers will be able to finance intermediary fees through their new mortgages.
The Financial Conduct Authority (FCA) has moved to help so-called mortgage prisoners by removing barriers which stopped them from finding a cheaper mortgage deal.
The new rules allow lenders to use a different and more proportionate affordability assessment for customers who meet certain criteria, such as being up-to-date with payments under their existing mortgage and not looking to move house, or borrow more (except to finance certain fees).
The FCA has made some changes to its proposals in light of feedback and eligible consumers will be able finance intermediary fees, as well as product or arrangement fees, through the new mortgage.
The regulator has also confirmed that customers of inactive lenders, also known as zombie lenders, and unregulated firms will have to be contacted and told that it has become simpler and easier for them to switch to another lender.
Christopher Woolard, executive director of strategy and competition at the FCA, said: "Responsible lending is hugely important, and unaffordable borrowing is a cause of significant harm.
"Mortgage prisoners are often stuck on more expensive mortgages.
"We are removing barriers to switching in our rules and we would like to see firms make changes to their own processes quickly in order that customers can benefit as soon as possible.
"We are also taking steps to help those who have mortgages with inactive lenders or unregulated entities to ensure that they are aware that they may now be able to switch and save money."
The rules come into force immediately.
