The charter includes allowing borrowers to contact their lender for help without impacting their credit file and enabling borrowers whose payments are up to date to switch when their fixed term ends without another affordability check.
Mortgage holders approaching the end of a fixed rate term will now have the chance to lock into a new deal up to six months ahead. They will also be able to request a better like-for-like deal with their lender right up until their new deal starts, if one is available. This allows borrowers to hedge their bets – if interest rates go up during the six months, those who locked in from the start will be paying a lower rate than otherwise.
In addition, a borrower will not be forced to leave their home unless in exceptional circumstances within a year of their first missed payment.
In a deal between lenders, the Financial Conduct Authority and the government, customers who are up to date with payments can either switch to interest-only for six months or extend their mortgage term to reduce their monthly payments. Customers will also have the option to revert to their original term within six months.
18 September, 2023