Amid a turbulent mortgage market and with many experiencing cost-of-living difficulties, Chancellor Jeremy Hunt has announced a new Mortgage Charter to bring relief to residential mortgage customers suffering from rising interest rates.
Talk, swap, and security
The Mortgage Charter launched in June has three key elements:
- Anyone can talk to their bank or mortgage lender for information and support, and this will have no impact on their credit score.
- People can choose to swap to an interest-only mortgage or extend their mortgage term, with the option to switch back to their original mortgage deal within six months with ‘no questions asked’ and no impact on their credit score.
- Customers won’t be forced to have their homes repossessed within 12 months of their first missed payment.
There are also additional measures to provide more flexibility to customers approaching the end of a fixed-rate deal. Under the new Mortgage Charter, customers will be able to lock in a deal up to six months ahead and still apply for any better deals that are available right up to the start of their new term.
Affordability checks will be waived for those switching to a new mortgage deal if they are up to date with their payments when their fixed term ends.
“On the side of households”
In the foreword to the Charter, Jeremy Hunt commented, “These measures should offer comfort to those who are anxious about high-interest rates and support for those who do get into difficulty. As we have consistently shown through the pandemic, and the consequences of the war in Ukraine, we will always be on the side of households.”
🚨 Data accurate as of the date of publication – 30.11.2023
🚨Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
🚨 The above material is for informational purposes only and does not constitute a sales offer or financial advice. Before taking out any insurance, credit agreement or other financial product, you should obtain individual advice on your requirements and the general terms of the contract.
Source: Quilter Financial Planning – Essentially Mortgages Q4 2023