The Mortgage Charter and what it means for you?

The Chancellor has recently agreed a new Mortgage Charter with the UK’s largest lenders, the Financial Conduct Authority, UK Finance and the Building Societies’ Association. The aim of this is to give borrowers reassurance and support them through this turbulent time of increasing interest rates.

 

Lenders representing 90% of the UK’s mortgage market have signed up to the charter.

 

All of the lenders signed up to the charter have agreed to the following:

 

  • To support all customers who are up to date with their payments to switch to a new mortgage deal at the end of their existing fixed rate deal without another affordability check

 

  • Customers will be able to choose to temporarily switch to interest-only payments or to extend their mortgage term in order to lower their payments in the short-term

 

  • Both options can be taken without a new affordability check

 

  • Neither option will have an adverse impact on their credit history

 

  • These measures will last up to six months with the option to revert back to the original term without checks

 

  • Both options will make the mortgage slightly more expensive in the long-run

 

  • Lenders will offer tailored support to customers and will deploy trained staff

 

  • Customers 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

 

These measures should offer comfort to those who are anxious about high interest rates and support for those who do get into difficulty. If you’re unsure its best to speak to a mortgage broker, they often have access to exclusive products which aren’t available to a customer directly and can offer advice across the market.

 

If you’d like further advice please get in touch at info@ssfs.co.uk

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