The Mortgage Charter is a package of measures that mortgage lenders have signed up to, to help people whose interest rate on their mortgage has increased, therefore putting them under financial pressure. So what’s the purpose of the Mortgage Charter and how does it impact you?
What is The Mortgage Charter?
The Mortgage Charter was created by the government in response to inflation and interest rate pressures on homeowners. The goal of the Mortgage Charter is to offer support to customers experiencing difficulties, with mortgage lenders agreeing to the following:
- Anyone worried about their mortgage repayments can contact their lender for help and guidance, without any impact on their credit file.
- 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.
- Lenders will provide well-timed information to help customers plan ahead should their current rate be due to end.
- Lenders will 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.
How does it impact you?
One important thing the Mortgage Charter does is make sure that mortgage lenders give clear and easy-to-understand information to customers. This helps you understand what you’re getting into and how much it will cost you, as well as outlining the support available to you, should you be in financial difficulty.
If your circumstances change or you are experiencing financial difficulties, please contact your adviser who will be able to provide you with help and support alongside your mortgage lender.
If you’d like to discuss the options available to you, contact your adviser today.
Source: Mortgage Intelligence (Published September 2023)
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