What assistance does the Mortgage Charter provide to borrowers?

What is the Mortgage Charter?

The Mortgage Charter is a set of rules agreed upon by the Financial Conduct Authority (FCA), the Chancellor of the Exchequer, and the main mortgage lenders in the United Kingdom. It offers provisions to assist regulated home mortgage borrowers in the current economic scenario. Those who are concerned about rising interest rates and who are having problems making mortgage payments are given assistance. Many borrowers are nearing the end of their fixed-rate mortgages and are concerned about how they will afford the current rates. Others are quite concerned about the prospect of repossession. The Charter addresses these concerns, and new measures have been agreed upon to assist reduce the anxiety that homeowners are currently feeling.

How can the Mortgage Charter help homeowners?

While the inflation rate will be kept under control, the FCA, the Chancellor, and lenders are all aware of the pressures on homeowners. Lenders prefer not to repossess properties and are offering solutions to people who are concerned about their present mortgage rates and repayments. The Mortgage Charter specifies the following measures.

Agreed by lenders

If you're having trouble making your mortgage payments, you can seek assistance from your lender and bank and discuss your choices. You may be confident that this will have no effect on your credit score.
Your lender will provide you with information to assist you plan ahead before your current rate expires.
If you are current on your mortgage payments and want to move to a new agreement when your fixed-rate term expires, your lender will assist you and no new affordability check will be performed.
Your lender will provide specialised assistance if you are having difficulty making your mortgage payments. Depending on your circumstances, you may be able to reduce your monthly payments by switching to an interest-only loan or extending the duration of your mortgage. You could be offered a part-interest, part-repayment agreement, or a short payment deferment. Your lender will consider a variety of solutions.

Agreed by signatories to the Mortgage Charter

You will not be forced to leave your house and have it repossessed within a year of your first missed payment. You'll be able to lock in a new contract up to 6 months before the end of your current fixed-rate deal starting on July 10th.
If better deal becomes available before your existing one expires, you can switch to it with your lender.
If your mortgage payments are current, you can either switch to interest-only payments for 6 months or extend your mortgage term. Both of these solutions will lower your monthly expenses. If you choose to extend your mortgage term, you will have 6 months to contact your lender if you want to return to your original term. As previously said, you do not need to be concerned about your credit score or a fresh affordability check.

Confirmed by the government

The Money and Pensions Service has received funding to provide debt advice. Support for Mortgage Interest has been made more accessible. After receiving Universal Credit for three months, you can now seek support with your mortgage interest payments.

Introduced by the FCA

Lenders have been given advice on how to assist borrowers who have been affected by the cost of living problem. Borrowers have been informed of their alternatives, as well as the assistance available if they are having difficulty making their mortgage payments.

Understand your options with expert guidance from our mortgage

The lenders who have signed up to the Mortgage Charter, which represent around 85% of the mortgage market, have already been proactive in delivering support to their consumers, and this support will increase now that the Charter is in place.