Mortgages matter

Many homeowners are facing a toxic mix of a slowing property market and rising interest rates. A significant number of homeowners took out fixed rate mortgage deals at historically low interest rates and are finding that their monthly mortgage payments are spiralling to unaffordable levels given the recent interest rate rises imposed by many lenders.

As a direct result of these challenges, the government has met with a number of key mortgage lenders and the Financial Conduct Authority (FCA) and has announced a package of measures to help homeowners. The 'Mortgage Charter' has been announced which provides the following support to residential mortgage customers.

• Anyone worried about their mortgage repayments can call their lender for information and support, without any impact on their credit score.
• Customers will not be forced to have their homes repossessed within 12 months from their first missed payment.
• Customers approaching the end of a fixed rate deal will be offered the chance to lock in a deal up to six months ahead. They will also be able to apply for a better deal right up until their new term starts, if one is available.
• A new agreement between lenders, the FCA and the government permitting customers to switch to an interest-only mortgage for six months or extend their mortgage term to reduce their monthly payments and switch back to their original term within the first six months if they choose to. Both options can be taken without a new affordability check or affecting their credit score.
• Support for customers who are up to date with payments to switch to a new mortgage deal at the end of their existing fixed rate deal without another affordability check.
• Providing well-timed information to help customers plan ahead should their current rate be due to end.
• The offer of tailored support for anyone struggling and deploy highly-trained staff to help customers. This could mean extending their term to reduce their payments, offering a switch to interest only payments, but also a range of other options like a temporary payment deferral or part interest-part repayment. The right option will depend on the customer's circumstances.

These measures are especially relevant for any homeowner facing repossession proceedings by their mortgage lender. Anyone in this situation should take specialist advice.

To discuss this or any other litigation or debt matter, contact us.