The UK chancellor has met the country’s principal mortgage lenders and the FCA to agree support for struggling mortgage borrowers.
The lenders, covering over 75% of the market, agreed to a new mortgage charter providing support residential mortgage customers.
Go deeper with GlobalData
Consumers have been assured that they can call their lender for support without impacting their credit score.
UK mortgage support – new measures include
- Customers won’t be forced to have their homes repossessed within 12 months from their first missed payment.
- Customers approaching the end of a fixed rate deal will be offered the chance to lock in a deal up to six months ahead. They will also be able to apply for a better deal until their new term starts, if one is available.
- A new agreement between lenders, the FCA and the government permitting customers to switch to an interest-only mortgage for six months, or extend their mortgage term to reduce their monthly payments and switch back to their original term within the first six months, if they choose to. Both options can be taken without a new affordability check or affecting their credit score.
- Support for customers who are up-to-date with payments. They may now switch to a new mortgage deal at the end of their existing fixed rate deal without another affordability check.
Help for two segments of the market
Chancellor of the Exchequer, Jeremy Hunt, said: “There are two groups of people that we are particularly worried about. The first are people at real risk of losing their homes because they fall behind in their mortgage payments. And the second are people who are having to change their mortgage because their fixed rate comes to an end, and they’re worried about the impact on their family finances of higher mortgage rates. So today I agreed with the banks and the principal mortgage lenders and the Financial Conduct Authority that absolutely anyone can talk to their bank or their mortgage lender and it will have no impact whatsoever on their credit score.
“Secondly, if you are anxious about the impact on your family finances and you change your mortgage to interest only or you extend the term of your mortgage and you want to go back to your original mortgage deal, within six months, you can do so, no questions asked and no impact on your credit score. That gives people a powerful new tool for managing their monthly budgets. And it will begin taking effect within the next two weeks.
Lenders: contacting millions of customers
David Postings, Chief Executive of UK Finance added: “Lenders recognise and understand this is an anxious time for mortgage customers and there is a lot of support available. Lenders have been working to contact and support millions of customers.
Following today’s meeting with the Chancellor and FCA, we will be working with regulators to continue to deliver a range of support options for customers.
Anyone who is worried about their finances should speak to 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.”
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
