In light of the increase in mortgage rates, the Chancellor has agreed a new Mortgage Charter with the UK’s largest lenders, the Financial Conduct Authority, UK Finance and the Building Societies’ Association, to give borrowers reassurance and support throughout this time.
All lenders have agreed:
- Anyone worried about their mortgage repayments can contact their lender for help and guidance, without any impact on their credit file.
- Support for customers who are up-to-date with payments to switch to a new mortgage deal at the end of their existing fixed rate deal without another affordability check.
- Lenders will provide well-timed information to help customers plan ahead should their current rate be due to end.
- Lenders will offer tailored support for anyone struggling and deploy trained staff to help customers. This could mean extending their term to reduce their payments, offering a switch to interest only payments, but also a range of other options like a temporary payment deferral or part interest-part repayment.
Signatories to the Charter have also agreed:
- From 26th June, a borrower will not be forced to leave their home without their consent unless in exceptional circumstances, in less than a year from their first missed payment.
- From 10th July, customers approaching the end of a fixed rate deal have the chance to lock in a deal up to six months ahead. They will also be able to manage their new deal and request a better like-for-like deal with their lender right up until their new term starts, if one is available.
- A new deal between lenders, the FCA and the government permitting customers who are up to date with their payments to switch to interest-only payments for six months, or extend their mortgage term to reduce their monthly payments and give customers the option to revert to their original term within 6 months.
If you have any questions about how this will affect you and your mortgage, please contact me on firstname.lastname@example.org.