Mortgage Payments

What is the Mortgage Charter?

Launched in June 2023, the Mortgage Charter sets out the support lenders should offer borrowers who are struggling with rising payments. Here's what it covers.

By Debbie Shepherd Published 3 November 2023 1 minute read
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The Mortgage Charter: help for struggling borrowers

The recent rise in interest rates has put real strain on household budgets. If you're struggling to make your mortgage payments, you're not alone, and the good news is that help is available.

The Mortgage Charter, launched in June 2023, provides lenders with a framework for supporting borrowers in financial difficulty. The Charter introduced a number of new measures, including:

  1. The option to switch to interest-only payments for six months.
  2. The ability to extend the mortgage term to reduce monthly payments.
  3. A ban on lenders repossessing homes without the borrower's consent within 12 months of a first missed payment.

If you're worried about meeting your mortgage payments, speak to your lender as early as possible, and if you'd like a second opinion or help understanding your options, give us a call.

Your home may be repossessed if you do not keep up repayments on a mortgage.

Frequently asked questions

What is the Mortgage Charter?

The Mortgage Charter is a set of commitments agreed between the government, the FCA and most major lenders to support borrowers worried about their payments. It sets out options such as moving to interest-only for a period, or extending the term, without a fresh affordability check.

Who does the Mortgage Charter apply to?

It applies to residential borrowers with participating lenders, and most of the big high-street names have signed up. The support is aimed both at people up to date with payments but concerned about affordability, and those already struggling.

Will using the Mortgage Charter affect my credit file?

Some of the temporary options are designed not to show as arrears or harm your credit score, but the detail depends on the specific arrangement and lender. Always confirm the impact with your lender before agreeing to anything.

What should I do if I'm worried about my payments?

Speak to your lender early, because they can only help if they know. It's also worth talking to a broker or adviser about whether a remortgage, a product transfer or a Charter option is the best route for your situation.

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