A new Mortgage Charter brings good news for the millions of homeowners facing a huge jump in monthly mortgage repayments following the recent Bank of England base rate increases.
Agreed between the Government, principal mortgage lenders and the Financial Conduct Authority (FCA), the charter sets out a range of measures to help homeowners struggling with their mortgage repayments. Approximately 90% of mortgage lenders have already signed up to the charter.
How will the mortgage charter help mortgagees?
If you’re worried about repaying your mortgage but are up to date with your payments, your options under the charter include:
Switching your mortgage deal to an interest-only plan for up to six months without impacting your credit score.
Extending the term of your mortgage with the option to revert to your original term within six months.
These measures will provide short-term relief to anyone struggling to meet their increased mortgage payments. However, it’s important to remember that switching to interest-only or increasing your mortgage term will cost more in the long run. Therefore, it’s essential to get professional advice before making any decisions.
Other measures within the mortgage charter
If you’re coming to the end of a fixed-rate term, you’ll be able to lock in a new deal up to six months ahead without another affordability check. You’ll also be able to manage your new deal and request a better like-for-like deal with your lender right up until your new term starts if one is available.
Also, those concerned about the risk of repossession will be relieved to know a borrower won’t be forced to leave their home without their consent, unless in exceptional circumstances, in less than a year from their first missed payment.
For full details of the charter, including a list of lenders that have signed up, click here.
What to do if you’re concerned about your mortgage payments?
If you’re worried about your mortgage situation, we recommend speaking to your lender or seeking advice from a professional mortgage broker. A broker can help you assess your options and source the right mortgage for your circumstances.
For help with your mortgage, please get in touch.