What is the Mortgage Charter?
Catherine Alexander
Partner
Lenders representing 85% of the mortgage market have signed up to the new Mortgage Charter, agreed by the UK's principal mortgage lenders and the Financial Conduct Authority (FCA), which has been introduced to support customers worried about their mortgage payments after interest rates were raised to 5% last month.
The charter is designed to support residential mortgage customers and includes:
An option to switch to an Interest Only deal for six months.
The ability to extend their mortgage term to reduce monthly payments and switch back to their original term within the first six months, if they choose to.
An option to lock in a new mortgage deal up to six months ahead of their current deal ending, and apply for a better deal right up until the new term starts.
An option to receive free tailored support from their lender, which may additionally include temporary payment deferral or part-interest part-repayment options.
A commitment that the lender will not repossess homes within a 12-month period from the first missed payment.
These support measures do not require additional affordability checks and will not impact the customers credit score.
Anyone who is worried out their mortgage repayments should get in touch with their lender and take advantage of the support that is available (this includes lenders who are not signed up to the Mortgage Charter as they will already offer a wide range of support for customers struggling with their mortgage payments). We are also happy to talk to any of our clients who may be looking for help or advice, as we are able to look at your financial circumstances as a whole there may also be other options for you to consider. Please do not hesitate to get in touch with your adviser, or our financial adviser team here at GDA.
This article isn’t personal advice. If you’re not sure whether a course of action is right for you, ask for financial advice. Your home may be repossessed if you do not keep up repayments on your mortgage.
