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.
Why was this Mortgage Charter created?
The Mortgage Charter follows the recent increase of the base rate by the Bank of England, which raised it to 5.00%, making the 13th consecutive rate rise, reaching the highest level in 15 years.
Consequently, more than one million borrowers on two- and five-year deals, which were often secured at rates below 2%, are now facing remortgages with rates three times higher.
According to Moneyfacts, the average two-year fixed residential mortgage rate rose by 3 basis points to 6.26% today compared to the previous day, while the average five-year fixed residential mortgage rate increased by 1 basis point to 5.87% from the previous day.
Which lenders have signed up to this?
The lenders who have signed the charter are:
- Natwest/RBS/Ulster Bank
- Lloyds/Halifax/Scottish Widows
- Nationwide Building Society
- Virgin Money/Clydesdale Bank/Yorkshire Bank
- Scottish Building Society
- Buckinghamshire Building Society
- Newcastle Building Society
- Hinkley & Rugby Building Society
- Nottingham Building Society
- Principality Building Society
- Suffolk Building Society
- West Bromwich Building Society
- Loughborough Building Society
- Family Building Society
- Coventry Building Society
- Yorkshire Building Society
- Skipton Building Society
- Leeds Building Society
- Bath Building Society
- Ecology Building Society
- The Vernon Building Society
- Leek Building Society
- Furness Building Society
- Melton Mowbray Building Society
- Glasgow Credit Union
- Darlington Building Society
- Progressive Building Society
- Co-op Bank
Get in Touch
Are you looking for professional and personable assistance in securing a remortgage? If so, we would love to hear from you today and arrange an initial chat. Call us today at 0345 512 0125 or use our online contact form.
Post from Thameside Mortgages