Lenders representing around 85% of the mortgage market have signed up to the new mortgage charter.
Participating mortgage lenders, led by UK Finance, will launch a communications campaign ensuring borrowers know what to expect when they contact their lender.
Lenders agreed to permit 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. Borrowers will have the option to revert to their original term within six months by contacting their lender.
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.
Today Chancellor @Jeremy_Hunt announced the Mortgage Charter in the @HouseofCommons.
This is a set of commitments agreed with lenders that will help those who are currently struggling with their mortgage rates.
To read the charter and find out more – click the video below ⬇️
— HM Treasury (@hmtreasury) June 26, 2023
From July 10, 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.
The details of the charter were published on gov.uk.
The Government cautioned that monthly payments after support may be higher than they otherwise would have been and overall costs over the life of the mortgage could be higher.
Affordability will need to be checked if borrowers wish to permanently convert to an interest-only mortgage, or where the mortgage term is proposed to be extended beyond the borrower’s expected retirement date.
– Here is a list of lenders who have signed up to the mortgage charter:
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
West Bromwich Building Society
Loughborough Building Society
Coventry Building Society
Yorkshire Building Society
The Vernon Building Society
Melton Mowbray Building Society
Darlington Building Society
Progressive Building Society
