What help are mortgage lenders giving to struggling borrowers and homeowners?
Over the past few years, mortgage interest rates have risen significantly, driven by the Bank of England increasing its base rate multiple times, and more recently, global events have seen rates rise again. While rates have started to ease in recent weeks, many homeowners are still feeling the squeeze, especially those coming off older, lower fixed-rate deals.
The good news? There is real support available. Concerns over the higher mortgage rates led to the Chancellor meeting with the top UK mortgage lenders and agreeing on a Mortgage Charter, introduced in June 2023. This is a commitment from lenders, including HSBC, Santander, Natwest, Barclays, and others, to offer meaningful help to customers who are struggling.
In this guide
- What is the Mortgage Charter?
- Does the Mortgage Charter apply to all mortgage customers?
- Get help before you miss a repayment
- What support do mortgage lenders offer customers?
- What if I’m already in arrears with my mortgage payments?
- What should I do when my fixed-rate mortgage ends?
- Which mortgage lenders have signed up to the Mortgage Charter?
Key takeaways
- The Mortgage Charter commits major UK lenders to offer support, including temporary interest-only payments, term extensions, and protection from repossession for 12 months after a first missed payment.
- You don't need to have missed a payment to get help. Contact your lender as early as possible to explore your options.
- 90% of the residential mortgage market is covered by the charter, but support is available from most lenders even if they haven't signed up.
- If you're struggling, options include switching to interest-only, extending your term, payment holidays, or remortgaging to a new lender for better rates.
- Start exploring remortgage options around 6 months before your fixed rate ends to secure the best deal.
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What is the Mortgage Charter?
The Mortgage Charter is a signed agreement between the top mortgage lenders in the UK, including Natwest, Nationwide, HSBC, Santander, and Barclays, committing them to offer specific support to struggling mortgage customers, on top of what they already provide.
Here are the key measures included in the charter:
- Switch to interest-only payments temporarily - borrowers can move to an interest-only mortgage for a set period to lower their monthly repayments, without it affecting their credit score.
- Extend the mortgage term - customers can extend their mortgage term by up to 6 months to reduce their monthly payments, and can reverse this within the first 6 months with no lasting impact on their credit file.
- No repossession within 12 months - lenders will not force the repossession of a property within 12 months from the first missed payment, giving homeowners time to explore their options.
- Switch deals without penalty - customers approaching the end of a fixed rate deal can lock in a new deal up to 6 months early, without incurring an early repayment charge.
Does the Mortgage Charter apply to all mortgage customers?
Not all lenders have signed up, but the vast majority have. The lenders who have signed up to the Mortgage Charter represent 90% of the residential market, so the charter should mean that the majority of mortgage customers have access to support.
If you are not with one of the lenders signed up to the Charter, don’t worry! Regardless of which lender you’re currently with, if you’re struggling to remortgage, you don’t have to stick with the same lender. There are ways to get access to lower interest rates by remortgaging to a new lender or considering supported schemes like guarantor mortgages.
Get help before you miss a repayment
You don’t need to have missed a mortgage payment to seek help from your lender. It’s important to talk to them as early as possible, even if you’re not remortgaging just yet.
The Mortgage Charter measures are now in place across the lenders who signed up. But even beyond the charter, there are things lenders are doing right now that could help if you’re struggling to remortgage.
What support do mortgage lenders offer customers?
If you’re struggling to make your mortgage repayments or are worried about remortgaging, the majority of mortgage lenders offer different support options to help, even if they haven’t signed up to the Mortgage Charter.
Here are some of the most common options available:
- Switching to interest-only payments - temporarily paying just the interest on the mortgage can significantly reduce monthly outgoings, giving borrowers breathing room while they get back on track.
- Extending the mortgage term - spreading the remaining balance over a longer period reduces monthly payments, though it means paying more interest over the life of the loan.
- Mortgage payment holiday - some lenders allow borrowers to pause payments entirely for a short period. Interest will still accrue, but it can provide temporary relief during a tough patch.
- Repayment plan - if a borrower has missed payments, their lender may agree to a structured plan where a small amount extra is added to each monthly payment until the arrears are cleared.
Payment deferral - in some cases, lenders may allow missed payments to be moved to the end of the mortgage term, so the borrower can resume normal payments without a lump-sum catch-up.
The right option will depend on individual circumstances. Speaking to a lender or a mortgage broker early, before any payments are missed, is always the best first step.
What if I’m already in arrears with my mortgage payments?
If you’re already in arrears with your mortgage payments, the most important thing to do is contact your mortgage lender as soon as possible. Even if payments have been missed, the lender still has a duty to help and is legally required to explore all options before considering repossession.
Homeowners who aren't sure where to start can also access free, impartial advice from organisations like Citizens Advice, StepChange, or the MoneyHelper service. These services can help borrowers understand their options and communicate with their lender.
The key message? It's never too late to ask for help, but the sooner someone reaches out, the more options they'll have.
Struggling with your mortgage payments?
Whether you’re worried about rising costs, remortgaging, or already behind on payments, support is available. Discover the best options available to you with Tembo, voted UK’s Best Mortgage Broker four years running.
What should I do when my fixed-rate mortgage ends?
The best thing to do is start exploring options early, ideally around 6 months before your current mortgage deal ends. That way, there's plenty of time to compare what's available across the market and lock in a competitive rate.
A trusted mortgage broker can search across the whole market to find the best mortgage rates. And if they're experts in affordability like Tembo, they can also help you discover ways to access lower mortgage rates through specialist schemes like guarantor mortgages.
Plus, if you remortgage through Tembo 6 months before the end of your current deal, and interest rates go down in that time, we can cancel the old application and submit a new one at no extra charge. If rates go up, then your interest rate will be safely locked in. All thanks to our free rate-checking service.
“It’s great to see lenders offering additional support to those struggling. With more options available to customers, it’s even more important to seek out expert advice and consider all your options to find the right solution for you. In an era of high interest rates, even a slight change in your mortgage product can make a substantial difference.”
Richard Dana
CEO of Tembo
Which mortgage lenders have signed up to the Mortgage Charter?
The following mortgage lenders have signed up to the Mortgage Charter. It's worth noting that this list may have been updated since it was first published. Homeowners can check the Government's Mortgage Charter page for the latest list:
- AIB Group (UK) plc, including AIB (NI) and Allied Irish Bank (GB)
- Aldermore Bank
- Bank of Ireland UK
- Barclays
- Bath Building Society
- Buckinghamshire Building Society
- The Co-operative Bank, including Platform and Britannia
- Coventry Building Society
- Danske Bank
- Darlington Building Society
- Dudley Building Society
- Earl Shilton Building Society
- Ecology Building Society
- Family Building Society
- Furness Building Society
- Glasgow Credit Union
- Hinckley & Rugby Building Society
- HSBC, including First Direct
- Kensington Mortgage Company
- Leeds Building Society
- Leek Building Society
- Lloyds, including Halifax and Scottish Widows
- Loughborough Building Society
- Mansfield Building Society
- Melton Mowbray Building Society
- Metro Bank
- Monmouthshire Building Society
- Nationwide Building Society
- Natwest, including RBS and Ulster Bank
- Newbury Building Society
- Newcastle Building Society, including Manchester Building Society
- Nottingham Building Society
- OSB Group plc, trading as Precise Mortgages and Kent Reliance
- Perenna
- Principality Building Society
- Progressive Building Society
- Santander
- Scottish Building Society
- Skipton Building Society
- Spring Financial Group Limited, including MPowered Mortgages
- Suffolk Building Society
- Teachers Building Society
- Tipton & Coseley Building Society
- TSB, including Whistletree
- The Vernon Building Society
- United Trust Bank Limited
- Virgin Money, including Clydesdale Bank and Yorkshire Bank
- West Bromwich Building Society
- Yorkshire Building Society
Don’t wait until your deal ends
Start comparing remortgage options around 6 months before your fixed rate expires to secure the best rates early and avoid moving onto your lender’s higher standard variable rate.
