Chancellor Jeremy Hunt commits to launch Mortgage Charter. He believes the new charter will “offer comfort” for 1.4 million homeowners who may struggle with the new remortgage deals that they are due to move onto this year.

The action follows the latest Bank of England base rate hike of 50 basis points, as well as Hunt’s meeting with several lenders last Friday at Number 11 Downing Street. The Treasury says: “At this meeting, lenders agreed to new commitments to support borrowers to help them as we go through this difficult period.”

The average 2-year fixed residential mortgage rate stands at 6.26% according to Moneyfacts, and the average 5-year fixed rate is currenlty 5.87% (Correct as of 28/06/23)

The 13 page charter was signed by 32 lenders, all agreeing to the following:

  • From 26th June, a borrower will not be forced to leave their home unless in exceptional cicumstances, in less than a year from their first missed payment.
  • From 10th July, customers approaching the end of a fixed-rate deal will have the chance to lock in a new deal up to 6 months before. 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 6 months, or
  • Extend their mortgage term to reduce their monthy repayments and give customers the option to revert to their origianl term within 6 months by contacing their lender.

One of the signatory lenders, The Nottigham Chief Executive Sue Hayes says: “This is a worrying time for many borrowers as the impact of successive base rate rises has put increasing pressure on household finances.”

We want to do everything we can to support customers through this period.”

Another, Leeds Building Society Chief Executive Richard Fearon adds: “At Leeds, we’ve already introduced a number of measures which have made a huge difference to borrowers, including not charging arrears fees since the Covid-19 pandemic and extending our products transfer window, and they will be strengthened by these additional commitments.”

Financial Conduct Authority Chief Executive Nikhil Rathi points out: “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.”

The lenders who have signed the charter are:

  • Barclays
  • Natwest, including RBS and Ulster Bank
  • Lloyds, including Halifax and Scottish Widows
  • Nationwise Building Society
  • HSBC, including First Direct
  • Santander
  • Virgin Money, inlcuding Clydesdale Bank and Yorkshire Bank
  • TSB
  • 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
  • Co-op Bank

As a mortgage is secured against your home it may be repossessed if you do not keep up with mortgage repayments.

Information from Knowledge Bank and gov.uk

Ruth Dolphin, Independent Financial Adviser, Runcorn, Widnes, Warrington, Chester, Frodsham, Liverpool, Wirral

Ruth Dolphin

Principal Independent Financial Adviser

Tel – 01928 761001

Email – ruth@dolphinfinancialltd.co.uk