Mortgage Charter excludes buy-to-let customers

In updated guidance issued on 26 June 2023, HM Treasury has confirmed that the commitments from lenders to support mortgage holders will not extend to buy-to-let borrowers.

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Lenders representing around 85% of the UK mortgage market have signed up to the Charter and, working with UK Finance and the FCA, have committed to implementing it at pace.

Mortgage brokers and industry experts have been quick to point out that much of the support included in the Charter already exists – apart from being able to move to an interest-only basis for six months – so it is unclear how much of an impact it will have. 

Signatories to the Charter have agreed:

  • From 26 June 2023, a borrower will not be forced to leave their home without their consent unless in exceptional circumstances, in less than a year from their first missed payment.
  • With effect from 10 July 2023 customers approaching the end of a fixed rate deal will have the chance to lock in a deal up to six months ahead. They will also be able to manage their new deal and request a better like for like deal with their lender right up until their new term starts, if one is available
  • A new deal between lenders, the Financial Conduct Authority and the UK Government permitting customers who are up to date with their payments to switch to interest-only payments for six months or extend their mortgage term to reduce their monthly payments with the option to revert to their original term within six months by contacting their lender

All lenders have also agreed:

  • Anyone worried about their mortgage repayments can contact their lender for help and guidance, without any impact on their credit file.
  • Support for customers who are up-to-date with payments to switch to a new mortgage deal at the end of their existing fixed rate deal without another affordability check.
  • Lenders will provide well-timed information to help customers plan ahead if their current rate is due to end.
  • Lenders will offer tailored support for anyone struggling and deploy highly trained staff to help customers. This could mean extending their term to reduce their payments, offering a switch to interest only payments, but also a range of other options like a temporary payment deferral or part interest-part repayment. The right option will depend on the customer’s circumstances.