![]() Lenders recognise and understand this is an anxious time for mortgage customers and there is a lot of support available. And that is why the lenders, including the nation’s largest, the FCA, UK Finance, the Government and others including the Building Societies’ Association have come together to provide borrowers with this Charter to give borrowers the necessary reassurance and support through these difficult times. Taken together, this puts the market in a significantly stronger position than before.īut we must not be complacent. Lenders have around 10% ‘owner-occupier mortgages’ on their books with loan-to-value rates greater than 75%, compared to around 25% before the 2008 financial crisis. This indicates homeowners have considerable equity in their homes. The average homeowner re-mortgaging over the last twelve months had around a 50% loan-to-value ratio. The FCA reported 0.86% of total residential mortgage balances in arrears in the first quarter of 2023 which is significantly lower than the 3.32% rate in 2009. Whilst this is an uncertain time the latest market indicators (FCA UK Finance) show that mortgage arrears and defaults remain below pre-pandemic levels, which were themselves extremely low. They have already proactively contacted millions of customers to offer additional support and following the agreement of this new Charter will be taking further steps to support borrowers. They have been working to proactively support their customers and will redouble these efforts to help borrowers through the coming months. The banks, building societies and credit unions recognise and appreciate this and there is a lot of support available. ![]() It is understandable that people will be worried right now, particularly if their current mortgage deal is due to end soon. At this meeting, lenders agreed to new commitments to support borrowers to help them as we go through this difficult period. This will always be the best course of action, and will always mean you pay less interest overall.īut in light of the current pressures on households, and following the commitments agreed to support borrowers in December, the Chancellor met with the UK’s largest mortgage lenders, UK Finance and the FCA on Friday (23 June). However, we recognise this is a concerning time for mortgage holders, particularly those who are due to come to the end of their existing deal in the immediate future.Īny borrower who can meet their new payments should continue to do so. The Government is committed to halving inflation by the end of the year, and supporting the Bank of England’s work to return it to 2%. High inflation harms everyone right across the economy, and the only way we can keep costs and mortgage rates down is to tackle the root causes of inflation. Rt Hon Jeremy Hunt MP, Chancellor of the Exchequer Introduction ![]() That’s why we’ve introduced one of the largest support packages in Europe worth £94 billion, or £3,300 per household on average over this year and last.īut we will do what it takes, and we won’t flinch in our resolve because we know that getting rid of high inflation from our economy is the only way that we can ultimately relieve pressure on family finances and on businesses. We know the pressure that families are feeling. We are absolutely committed to supporting the Bank of England to do what it takes. Tackling high inflation is the Prime Minister’s and my number one priority. As we have consistently shown through the pandemic, and the consequences of the war in Ukraine, we will always be on the side of households. These measures should offer comfort to those who are anxious about high interest rates and support for those who do get into difficulty. I welcome their moves to support borrowers. The Financial Conduct Authority has set out actions it will take to support these commitments. Following our meetings in December and June the principal mortgage lenders have agreed to set out here the commitments they make to their regulated residential mortgage borrowers.
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