UK Banks Mortgage Charter: Does it go far enough?

With the Bank of England orchestrating the steepest increases in interest rates in history, mortgage borrowers have been screaming for help. Failure to get support could force many homeowners who are finding their mortgages unaffordable to resort to selling their homes. The government responded by getting the largest mortgage lenders and UK finance to agree to a Mortgage Charter.

What is the aim of this Mortgage Charter?

The Charter aims to help and support borrowers through this difficult period of adjusting to meaningfully higher mortgage rates.

Who has signed up?

Lenders, including the biggest banks and building societies, representing approximately 90% of the mortgage market are signatories to the Mortgage Charter. Borrowers not covered by these signatories would not benefit from it. Instead, they would have to rely on the support measures each lender offers to borrowers facing difficulty in meeting their mortgage payments.

What does it achieve?

It helps people on a mortgage who have kept up to date on their mortgage payments to

1. Remain in their home for a period of one year from their first missed payment.
2. Switch from a repayment mortgage to an interest-only mortgage for a period of 6 months or
3. Extend their mortgage term to reduce their monthly mortgage payments along with the option to revert to their original term after contacting their lender.

Read the full article here.