Chancellor Jeremy Hunt has announced a new Mortgage Charter, which has been signed by 32 lenders, will provide reassurance to 1.4 million homeowners who may face challenges with the new remortgage deals they are expected to transition to this year.
In light of the increasing mortgage rates, these lenders (who represent 85% of the market) have agreed to new commitments to support borrowers during this difficult period.
The lenders have made the following agreements:
- Borrowers will not be forced to leave their homes without their consent, unless there are exceptional circumstances, for at least a year after their first missed payment (from 26th June).
- Customers approaching the end of a fixed-rate deal will have the opportunity to secure a deal up to six months in advance. They will also have the ability to manage their new deal and request a similar improved deal with their lender until the start of the new term, if one is available (from 10th July).
- Customers who are up to date with their payments can choose between switching to interest-only payments for six months or extending their mortgage term to reduce their monthly payments. Customers will also have the option to revert to their original term within six months by contacting their lender.
