The chancellor has announced that lenders have committed to proactively contact 1.6 million customers whose fixed rate mortgage deals end between now and the end of the year. This will set out customers’ options or how to access bespoke support well before the payment changes.
The measures aim to provide reassurance amid and mitigate the impact of the conflict in Iran on households and small businesses.
This week the chancellor and economic secretary brought together the six largest banks and building societies, alongside UK Finance, securing the commitment from all lenders present.
The chancellor also reaffirmed the Mortgage Charter with lenders, keeping clear the safety net in place for anyone worried about their mortgage.
The Charter enables customers to book a new rate up to six months ahead and switch to a new deal with their existing lender without a fresh affordability check.
It also offers temporary breathing space, including a move to interest-only payments for six months, with support discussions not affecting credit scores.
Lenders reported more customers getting in touch for guidance, but the chancellor says real time data shows "lending holding up well and arrears remaining low".
Rachel Reeves said: "In uncertain times, people need clear reassurance and practical help. That’s why I’ve brought the biggest lenders together to step up support and make sure anyone who is worried can access the Mortgage Charter options quickly, without their credit score being affected."
Damien Burke, head of regulatory practice at Broadstone, commented: “This is a positive step that should help borrowers better understand their options well before their fixed rate deals end, which can make a significant difference in helping households plan and manage higher repayments. At a time of macro-economic uncertainty, proactive communication and early engagement are often the most effective ways to provide reassurance and prevent short-term payment pressure from turning into longer-term financial difficulty.
“From the lenders’ perspective, the main challenge will be operational in contacting a large number of customers and providing meaningful, tailored support. I think its another clear use case for utilising ongoing, tailored, individual affordability assessments and flexible payment options to provide tailored, targeted support in an efficient manner."
