Around 85 per cent of lenders operating in the UK’s mortgage market have signed a government charter agreeing to support borrowers.
The Charter was published following the Chancellor’s meeting with lenders on Friday to discuss the impact of rising mortgage rates on homeowners.
Chancellor Jeremy Hunt says the new Mortgage Charter signed by lenders will ‘offer comfort’ for 1.4 million homeowners who may struggle with the new remortgage deals they are set to move onto this year.
The lenders have agreed to:
- 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 10 July, customers approaching the end of a fixed-rate deal will 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 Financial Conduct Authority 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 six months by contacting their lender
Nikhil Rathi, Chief Executive of the Financial Conduct Authority said “This Charter builds on the work we and lenders have done over recent years to ensure those who get into difficulty receive the support they need. The additional commitments from signatories provides customers with clarity and certainty on how they can expect to be treated. Mortgages remain a priority for the FCA, and we will continue to work closely with lenders to ensure borrowers are supported, as part of our work on consumers who might face financial difficulties.”
David Postings, CEO UK Finance said “Lenders recognise and understand this is an anxious time for mortgage customers and there is a lot of support available. Lenders have been contacting and supporting millions of customers and are working with the government and regulators to continue to deliver a range of support options for customers. Anyone who is worried about their finances should contact their lender to find out what options are available to help. Contacting your lender to talk about the options available will not impact your credit score.”
The lenders who have signed the charter are:
- Natwest, including RBS and Ulster Bank
- Lloyds, including Halifax and Scottish Widows
- Nationwide Building Society
- HSBC, including First Direct
- Virgin Money, including Clydesdale Bank and Yorkshire Bank
- Scottish Building Society
- Buckinghamshire Building Society
- Newcastle Building Society
- Hinkley & Rugby Building Society
- Nottingham Building Society
- Principality Building Society
- Suffolk Building Society
- West Bromwich Building Society
- Loughborough Building Society
- Family Building Society
- Coventry Building Society
- Yorkshire Building Society
- Skipton Building Society
- Leeds Building Society
- Bath Building Society
- Ecology Building Society
- The Vernon Building Society
- Leek Building Society
- Furness Building Society
- Melton Mowbray Building Society
- Glasgow Credit Union
- Darlington Building Society
- Progressive Building Society
- The Co-operative Bank, including Platform and Britannia