The Chancellor, Jeremy Hunt, recently hosted a meeting at 11 Downing Street to discuss what help may be available to support homeowners who encounter problems paying their mortgage. The meeting was attended by leaders of the UK’s major mortgage lenders, the Chair of the Financial Conduct Authority (FCA), and Martin Lewis of Money Saving Expert. The meeting was convened in light of the increase in interest rates over the last year coupled with rising inflation.
At the meeting, mortgage lenders committed to help all their customers by:
- enabling customers who are up to date with payments to switch to a new competitive, mortgage deal without another affordability test;
- providing well-timed information to help customers plan ahead should their current rate be due to end;
- offering tailored support to those who start to struggle with payments, which may vary by lender, but may include extending the term of the mortgage to make monthly payments lower, a short-term reduction in monthly payments or accepting interest-only payments for a period where appropriate; and
- ensuring highly trained and experienced staff are on hand to help where needed.
The government also confirmed that they would take action to make Support for Mortgage Interest easier to access and increased funding for the Money and Pensions Service to provide debt advice in England.
The FCA in turn published a consultation on draft guidance clarifying how lenders can support borrowers impacted by the rising cost of living and will also publish more information for borrowers struggling to make their monthly mortgage payment.
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