The New Mortgage Charter: A Beacon of Hope for Borrowers
In the face of rising interest rates, mortgage lenders and the Financial Conduct Authority (FCA) have come together to offer a lifeline to residential mortgage borrowers. The new Mortgage Charter, signed by lenders representing 85% of the residential market, outlines a set of standards designed to support borrowers who are concerned about meeting their mortgage payments.
What is the Mortgage Charter?
The Mortgage Charter is a package of measures that lenders have agreed to adopt when assisting borrowers. These measures are designed to provide comfort to those anxious about high interest rates and offer support to those who find themselves in difficulty.
The Charter includes several key commitments:
- Borrowers 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 timely information to help customers plan ahead should their current rate be due to end.
- Lenders will offer tailored support for anyone struggling, deploying highly trained staff to help customers. This could mean extending their term to reduce their payments, offering a switch to interest only payments, or other options like a temporary payment deferral or part interest-part repayment.
Who has signed up?
A wide range of lenders have signed up to the Charter, including Barclays, Natwest, Lloyds, Nationwide Building Society, HSBC, Santander, Virgin Money, and many others. This means that the majority of borrowers in the UK will be able to benefit from the measures outlined in the Charter.
What does this mean for borrowers?
The Mortgage Charter offers a beacon of hope for borrowers who are worried about the impact of rising interest rates on their mortgage payments. By offering a range of support options and committing to clear, timely communication, lenders are demonstrating their commitment to helping borrowers navigate these challenging times.
If you’re worried about your finances, don’t hesitate to contact us or your lender to find out what options are available to help. Remember, contacting your lender to talk about the options available will not impact your credit score.