The latest data from the FCA shows that a minimum of around 1.1 million mortgages benefited from one or more of the options set out in the Mortgage Charter, whether explicitly or through a business-as-usual channel.
This is up from the 760,000 accounts utlising the charter in the FCA's March data.
The Charter, introduced in June 2023, contains a series of commitments made by mortgage lenders. There are 49 signatories, representing around 90% of the mortgage market.
These commitments include:
- not to force a borrower to leave their home without their consent, unless in exceptional circumstances, in less than a year from their first missed payment,
- to allow customers to lock in a new deal up to six months ahead of the end of a fixed rate deal, and to request a better like-for-like deal up until the new one starts, if one is available,
- without assessing affordability, to permit customers who are up to date with their payments to switch to interest-only payments for six months, or to extend their mortgage term with the option to revert to their original term within six months.
The latest figures show that around 113,000 mortgages have temporarily reduced monthly payments via the new FCA rules, up from 90,543 in March.
Between July 2023 and April 2024, the monthly payments on around 159,000 mortgages were reduced as people switched to temporarily paying interest-only or extended their mortgage term. This is around 1.8% of regulated mortgage contracts. The data shows that only 263 term extensions were reversed, which could indicate that borrowers seeking a temporary reduction in their payments are more likely to opt for an interest-only period.
91 properties were repossessed within 12 months of missing the first payment. Firms report these were for customer-driven reasons, for example voluntary possessions or abandoned/vacant properties.
