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On the 26th of June 2023, the Government and the UK's principal mortgage lenders agreed they will provide additional support for customers who may experience difficulty with high-interest rates.

Which lenders are part of the charter?

Before we get into the detail of the charter it is important to note that only customers of lenders signed up to the charter will benefit. They are:

• Bank of Ireland UK
• Barclays
• Bath Building Society
• Buckinghamshire Building Society
• The Co-operative Bank, including Platform and Britannia
• Coventry Building Society
• Darlington Building Society
• Earl Shilton Building Society
• Ecology Building Society
• Family Building Society
• Furness Building Society
• Glasgow Credit Union
• Hinkley & Rugby Building Society
• HSBC, including First Direct
• Leeds Building Society
• Leek Building Society
• Lloyds, including Halifax and Scottish Widows
• Loughborough Building Society
• Melton Mowbray Building Society
• Nationwide Building Society
• Natwest, including RBS and Ulster Bank
• Newcastle Building Society
• Nottingham Building Society
• Principality Building Society
• Progressive Building Society
• Santander
• Scottish Building Society
• Skipton Building Society
• Suffolk Building Society
• Tipton & Coseley Building Society
• TSB
• The Vernon Building Society
• United Trust Bank Limited
• Virgin Money, including Clydesdale Bank and Yorkshire Bank
• West Bromwich Building Society
• Yorkshire Building Society

What has been agreed upon?

All of the lenders have agreed to the following. It is important to note that customers must be currently up to date with their payments on the 26th of June 2023.

• For customers up to date with their payments the opportunity to switch to a new mortgage deal at the end of their current deal without any new affordability check.
• Tailored support which includes extending a mortgage term to reduce payments, a switch to interest-only payments as well as other measures including temporary payment deferral or part interest, part repayment.
• From the 26th of June 2023 no customers will be forced to leave their homes without their consent unless in extreme circumstances less than one year from their first missed payment.
• For customers who are up to date with their payments, the option to switch to interest-only payments for up to six months.
• Also for customers who are up to date with their payments, the ability to extend the mortgage term to reduce their monthly payments with an option to revert to the original term later.

Notes

Again, the charter only applies to customers of lenders participating in the charter. The options above are restricted further to first-charge residential mortgages and borrowers who are currently up to date with their payments.

For those customers who are already in arrears contact with the lender as early as possible is key, other support is available. Lenders may already be offering similar options to those in the charter to all clients. Even those lenders not signed up to the charter must still have support options in place.

The charter applies across the whole of the UK. England, Wales, Scotland and Northern Ireland.

Summary

Is it enough? It's better than nothing is the best I can give to it. There is a lot of tension between borrowers, lenders and the Government. Many will argue that supporting customers with high-interest rates is not something that should be the responsibility of the Government.

In 2014 the Mortgage Market Review resulted in every client applying for a mortgage to have their ability stress tested by adding at least 3% to their rate and demonstrating they can still afford it. Back then a rate averaging around 7% was used. Whilst that should then suggest the majority of borrowers should still be able to cope at current rates of 6%, nobody factored in the high inflation we are seeing even with higher income.

Time will tell just how many will struggle to the point that the options in this charter will be required.