Approximately 85% of lenders operating in the UK’s mortgage market have committed to supporting borrowers by signing a government charter. The Charter was made public after a meeting with lenders and the Chancellor on Friday, where they discussed the impact of rising mortgage rates on homeowners.

Chancellor Jeremy Hunt emphasized that the newly signed Mortgage Charter will bring reassurance to around 1.4 million homeowners who may face difficulties with the new remortgage deals they are transitioning to this year.

Under the Charter, the lenders have agreed to:

Starting from 26th June, a borrower cannot be compelled to leave their home without their consent unless exceptional circumstances arise, and this cannot occur within a year from their first missed payment.

From 10th July, customers approaching the end of a fixed-rate deal will have the opportunity to lock in a deal up to six months in advance. Additionally, they can manage their new deal and request a better like-for-like deal from their lender until the new term commences if such an option is available.

A new arrangement has been established involving lenders, the Financial Conduct Authority, and the government to allow customers who are up to date with their payments to:

a) Switch to interest-only payments for six months, or

b) Extend their mortgage term to reduce their monthly payments. They will also have the choice to revert to their original term within six months by contacting their lender.

Nikhil Rathi, Chief Executive of the Financial Conduct Authority, commented that the Charter builds on the previous efforts made by both lenders and the authority to ensure adequate support for those facing financial difficulties. The additional commitments from the lenders provide customers with clarity and certainty on how they will be treated during these challenging times. Mortgages remain a priority for the FCA, and they will continue working closely with lenders to ensure borrowers receive support when needed.

David Postings, CEO of UK Finance, acknowledged the anxiety experienced by mortgage customers and highlighted the available support. Lenders have been actively contacting and assisting millions of customers and are collaborating with the government and regulators to offer a range of support options. Customers facing financial concerns are encouraged to contact their lender to explore the available assistance, reassuring them that this action will not impact their credit score.

The lenders who have signed the charter are:  

• Barclays  
• Natwest, including RBS and Ulster Bank  
• Lloyds, including Halifax and Scottish Widows  
• Nationwide Building Society  
• HSBC, including First Direct  
• Santander  
• Virgin Money, including Clydesdale Bank and Yorkshire Bank  
• TSB  
• Scottish Building Society  
• Buckinghamshire Building Society  
• Newcastle Building Society  
• Hinkley & Rugby Building Society  
• Nottingham Building Society  
• Principality Building Society  
• Suffolk Building Society  
• West Bromwich Building Society  
• Loughborough Building Society  
• Family Building Society  
• Coventry Building Society  
• Yorkshire Building Society  
• Skipton Building Society  
• Leeds Building Society  
• Bath Building Society  
• Ecology Building Society  
• The Vernon Building Society  
• Leek Building Society  
• Furness Building Society  
• Melton Mowbray Building Society  
• Glasgow Credit Union  
• Darlington Building Society  
• Progressive Building Society  
• Co-op Bank