Shareholder Protection Insurance Cover


NEWS: What is the new Mortgage Charter and what help does it offer?

Posted August 3, 2023

On Monday 26 June 2023, the government announced it has been working with the FCA and introduced a new Mortgage Charter for residential borrowers to offer support for those who may be anxious about high interest rates and provide support for those who may find themselves getting into difficulty with mortgage payments.

As part of the Mortgage Charter, if you have a repayment or part-and-part mortgage, you can apply to reduce your monthly payments by either switching to interest-only for six months, or extending your mortgage term.

If you switch to interest-only payments this would make your monthly payments lower during this six-month period, but it would increase the overall cost of your mortgage over its full term, as you won’t be paying off any of the capital during this time.  At the end of the 6 months, you’ll automatically go back to your original mortgage payment plan and your monthly payments will increase to a higher level than before you switched to interest-only. This is because you’re paying back the same balance over a reduced period of time.

Alternatively, you can apply to extend your term so you repay it over a longer period, which will reduce your monthly payments. Doing this means your mortgage will cost more over the full term, because you’ll pay interest for a longer period.

Lenders won’t need to do a new affordability assessment and it won’t be reported negatively to credit reference agencies however there are many alternative options that may be available to you especially if you are on a high variable rate or if you are coming to the end of your current deal and your penalties are due to expire. 

We can typically secure rates 6-12 months in advance and as a mortgage broker we can offer personal advice tailored to your individual needs and have access to deals from the whole of the market including exclusive deals that may not be available on the high street and will compare these to what your existing lender is offering to make sure you are getting the most competitive deal that is right for you. 

For a free initial consultation, please contact Shannan Cliffe on 01270 620 555 or email who will be able to review your situation and offer the best advice for your circumstances.