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Over 120,000 borrowers slash payments via Mortgage Charter

Monthly payments on some 123,000 home loan accounts were cut in the first eight months of the government’s Mortgage Charter.  

The Financial Conduct Authority’s newly-published data says around 1.4% of regulated mortgage contracts were changed, either as borrowers switched to temporarily paying interest-only or extended their mortgage term.

The FCA comments: “The data shows that only 103 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.” 


The charter was signed by 48 of the UK’s biggest lenders, representing around 90% of the mortgage market and its 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 their current fix, and to request a better like-for-like deal up until the new one starts, if one is available;

·         To permit customers who are up to date with their payments to switch to interest-only payments for six months, without assessing affordability, or, to extend their mortgage term with the option to revert to their original term within six months  

The FCA says some 760,000 accounts “benefited from one or more of the options set out in the charter, whether explicitly or through a business-as-usual channel”.  

Just 67 properties were repossessed within a year of missing the first payment in the period covered by its research and the FCA comments: “Firms report these were for customer-driven reasons, for example, voluntary possessions or abandoned/vacant properties.” 


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