The Conservative government has just announced that a Mortgage Charter has been agreed with major lenders to help homeowners.
The Mortgage Charter means that:
From 26th June, 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.
From 10 July 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.
A new deal between lenders, the FCA and the government will allow 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 and give customers the option to revert to their original term within 6 months by contacting their lender.
Additionally, lenders have agreed that:
· Anyone worried about their mortgage repayments can contact their lender for help and guidance, without any impact on their credit file.
· Customers who are up-to-date with payments can switch to a new mortgage deal at the end of their existing fixed rate deal without another affordability check.
· Lenders will provide well-timed information to help customers plan ahead should their current rate be due to end.
· Lenders will offer tailored support for anyone struggling with their payments, this could mean extending their term to reduce their payments, offering a switch to interest only payments, but also a range of other options like a temporary payment deferral or part interest-part repayment.
The Mortgage Charter can be viewed at: https://assets.publishing.service.gov.uk/government/uploads/system/uplo…
