Do you need help or support with your mortgage? The Mortgage Charter 2023 … What is it? And how it can offer you mortgage support and help you as an existing mortgage customer.
On June 26, 2023, the UK government introduced a new initiative known as the Mortgage Charter. This development was the result of discussions held with major mortgage lenders and the Financial Conduct Authority in response to rising inflation and the associated pressures on households, particularly those with mortgages.
The Charter outlines a set of commitments that lenders are expected to adopt when assisting their existing mortgage borrowers who may be struggling to manage their monthly mortgage payments. Some of the things that lenders have agreed to offer are:-
Secure a new rate up to 9 months before your current one ends
The new rate will not start until the day after your current fixed product ends but it will be locked in no matter whether interest rates rise again. And if there is a better deal before completion takes place then I can cancel the one we applied for and switch to the cheaper one instead.
Change from repayment to interest only for 6 months
Keep in mind your mortgage balance won’t go down while you’re only paying the interest. That means after the 6 months, your payments will be higher than they are now as you’ll be paying off the mortgage over a shorter term.
Switch to a new deal with your existing lender without an affordability check
It may be the case that either lender affordability calculations or your income has changed since you took your original mortgage. If this is the case your current lender may be offering you the chance to chose a new product with them 6 months ahead, without undertaking their scrutinous affordability checks. But you must be up to date with your mortagge payments to qualify.
Extend your mortgage term to lower your mortgage payments
Extending your mortgage term is one way to help reduce your monthly payments. If you pay into a pension you may be able to extend your mortgage term to age 75 (depending on which lender you are with). A term increase will increase the amount of interest you have to repay overall but it does not have to be permanent. When your balance has reduced and interest rates have gone down you can shorten your term.
Protection Against Immediate Repossession
Customers won’t be forced to have their homes repossessed within 12 months from their first missed payment. This provides a safety net for borrowers who may be experiencing temporary financial difficulties.
Support for Concerned Customers
Customers worried about their mortgage repayments can call their lender for information and support, without any impact on their credit score. This provision encourages open communication between borrowers and lenders.
Lenders who have signed up to this Charter
Aldermore Bank
Bank of Ireland UK
Barclays
Bath Building Society
Buckinghamshire Building Society
The Co-operative Bank, including Platform and Britannia
Coventry Building Society
Danske Bank
Darlington Building Society
Earl Shilton Building Society
Ecology Building Society
Family Building Society
Furness Building Society
Glasgow Credit Union
Hinckley & Rugby Building Society
HSBC, including First Direct
Kensington Mortgage Company
Leeds Building Society
Leek Building Society
Lloyds, including Halifax and Scottish Widows
Loughborough Building Society
Melton Mowbray Building Society
Metro Bank
Monmouthshire Building Society
Nationwide Building Society
Natwest, including RBS and Ulster Bank
Newbury Building Society
Newcastle Building Society
Nottingham Building Society
Principality Building Society
Progressive Building Society
Santander
Scottish Building Society
Skipton Building Society
Suffolk Building Society
Teachers Building Society
Tipton & Coseley Building Society
TSB, including Whistletree
The Vernon Building Society
United Trust Bank Limited
Virgin Money, including Clydesdale Bank and Yorkshire Bank
West Bromwich Building Society
Yorkshire Building Society and Accord
These lenders represent approximately 90% of the mortgage market.
If you are struggling to make your current mortgage payments or you are concerned about what your new mortgage payments will be once your current fixed rate comes to an end DONT PANIC but please please DO GET IN TOUCH WITH ME as soon as possible. I am happy to have a free chat with you to give you some advice on your current mortgage options before you speak to your lender directly or to prepare you for what your future mortgage options may be in today’s interest rate market.
Beth Rodwell – Director
07903 536007 or beth@bemortgages.co.uk