The Mortgage Charter

On 26 June 2023, the Government published the Mortgage Charter.

The charter is a set of commitments agreed between the government, UK lenders and regulators to give more options and support to people struggling with their mortgage payments.

The Mortgage Charter support is only available to residential customers who are up to date with their mortgage payments. If you are not a residential customer or are currently behind on your mortgage, please contact our payment support team on 0344 481 0030 to discuss alternative options.

What the Mortgage Charter means for you

As a lender we’re pleased to have signed up to the Mortgage Charter. This means that, if you are up to date with your mortgage payments, you can:

Switch to a new deal

If your current deal is ending, you can switch to a new deal with us up to four months before your existing deal ends. We will contact you around four months before your mortgage deal is due to end with the product options we have available.

Switching with us is easy as we won’t conduct any affordability checks. By switching early, your new rate will be locked in, should you find our rates reduce before your current deal ends you can contact us to review your offer.

Temporarily switch to interest-only for six months

Under the Mortgage Charter, you can switch to interest-only for a period of up to six months. Please keep in mind that if you switch to interest-only your mortgage balance won't go down as you'll only be paying the interest. That means after the six months, your payments will be higher than they are now as you'll be paying off the mortgage over a shorter term.

Extend your mortgage term

Under the Mortgage Charter, to give you some breathing space, you can increase the length of your mortgage, so you’ll pay less each month. However, although you’ll pay less each month, overall extending the term of your mortgage means that you’ll pay more interest.

If you are struggling or already behind with your payments, you can:

Ask us for help

Although the Mortgage Charter options aren’t available if you have already missed payments, you can still contact us to see what other options we may have available. Speaking to our payment support team will not affect your credit rating or appear on your credit file. Our specialist advisers are here to help and can offer a range of options to help you through any payment difficulties you may be experiencing.

Stay in your home for at least 12 months, even if you’re unable to pay your mortgage

As a signatory to the Mortgage Charter, we have committed that, except in a few exceptional situations, we won’t force anyone to leave their home for at least a year after their first missed payment. However, it is important that you contact us to tell us about your circumstances and we may be able to offer alternative options.

What you need to know about the Mortgage Charter

• Whilst the below options are available, we recommend that if you can pay your mortgage payments then you continue to do so. This is because borrowers who do not make changes to their mortgage payments will pay less interest overall.
• Any changes must be by agreement of all parties on the mortgage.
• Borrowers taking up these options should be prepared for higher monthly payments after the temporary period is over, and higher overall costs over the term of their mortgage.
• You can only select one of the options.

Temporary interest-only for six months

• You can make this request without having advice or an affordability assessment.
• If you select this option, your mortgage will be switched to temporary interest-only from your next available payment due date. We need at least 15 days to submit a change for your next due date from the day of request.
• If you switch to temporary interest-only you can cancel this at any point within the six-month period.
• This option can only be taken once. Any subsequent request for interest-only will be subject to our normal criteria.
• At the end of the six months you will revert back to a repayment basis and with your payments increasing as you will be required to pay the deferred amount over your remaining term (example shown below).
• Selecting this option will not result in a negative report to the Credit Reference Agency.

The following illustration shows how using this option would affect a borrower with an outstanding balance of £100,000, paying interest of 6% and with 10 years remaining on their contract.

Temporary interest-only example

Payments before temporarily paying interest-only: £1,110.
Payments while temporarily paying interest-only: £500.
Payments after end of temporarily paying interest-only: £1,153.

This borrower defers approximately £3,720 over the six months of the interest-only period, which as above remains payable over the rest of the term. Assuming their interest rate remains at 6% for the remainder of their term, they will pay around £1,200 more overall than if they had continued to make capital payments.

Term extension

• You can make this request without having advice or an affordability assessment.
  We can extend your term up to age 75 or your expected retirement age if earlier. If you want to extend your term past your expected retirement age this may be possible but is not a change you can make under the Mortgage Charter, and you will need to speak to one of our mortgage advisers.
• Once you have contacted us, this does not mean that the request has been processed as we need to provide you with a personalised illustration before any change can take place. We will not make any changes to your account until you confirm that you want to proceed having read the information we have provided you.
• You can reverse the term extension within six months of the initial change being made without an affordability check (example shown below).
• If you want to reverse the term extension after six months this will be subject to our normal criteria.
• Selecting this option will not result in a negative report to the Credit Reference Agency.

The following illustration shows how reversal of a term extension would affect a borrower with an outstanding balance of £100,000, paying interest of 6% and with 10 years remaining on their contract.

Reversal of term extension

Payments before extension: £1,110.
Payments following 10-year term extension: £716.
Payments following reversal of extension after six months: £1,138.

The borrower defers approximately £2,400 over the six months their term was extended, which still remains payable once their term reverts. Assuming their interest rate remains at 6% for the remainder of the term, they will pay around £800 more overall that if they had kept their term constant.

You can use our mortgage repayment calculator to provide an indication of the change in your payments as a result of increasing your mortgage term. The calculator will also help you to compare the cost of your mortgage on repayment or interest-only.

The amounts calculated by the calculator are for illustrative purposes only and do not represent the actual change increasing your mortgage term or temporarily switching to interest-only will make to your payments.

For these comparisons please put £0 in the 'Lender fees' section.

• Current interest rate of your mortgage.
• Current remaining mortgage balance.