On Friday 23rd June, the Chancellor of the Exchequer met the UK's principal mortgage lenders and the Financial Conduct Authority (FCA) to agree support for people struggling with mortgage repayments.
The lenders – which cover over 75% of the market - agreed to a new mortgage charter providing support to residential mortgage customers. The charter will support Loughborough’s mortgage holders in the following ways:
- Anyone worried about their mortgage repayments can call their lender for information and support, without any impact on their credit score. Mortgage holders are encouraged to contact their bank who are there to help.
- 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 conservative 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.
- Offer 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.
On Monday, the Chancellor presented his mortgage charter to the House of Commons for Members of Parliament to put questions to him about it.
Jane Hunt MP, Member of Parliament for Loughborough, asked:
“… I recently met with constituents in the Wolds villages who have shared ownership arrangements of their properties with a Housing Association. They have never actually missed a payment. Please can my Rt. Hon. Friend confirm that the mortgage charter will assist those with shared ownership schemes across the country.”
The Chancellor replied:
“I am absolutely delighted to give that confirmation.”
After speaking in the chamber, Jane Hunt MP said:
“Today's news is great for any mortgage holder in Loughborough because it will support them in managing their payments, or making sure they have the best possible mortgage by locking into a new deal up to six months before their fixed rate mortgage is due to end.
“I want as many people as possible to be able to own their own home here in the constituency, at a fair price, which is why A Place that is Home is part of my 6-point plan for Loughborough.”
