Help with rising mortgage rates

Mortgage lenders and the Financial Conduct Authority have agreed a plan with the government.

To help people with residential mortgages (excluding Buy to Let), lenders like us, the Financial Conduct Authority and the government have agreed a set of new standards. These make sure the people affected by increasing mortgage repayment costs are treated fairly and get the extra support they need. 

It's called the Mortgage Charter

We'll be giving the support agreed by the Charter. And it doesn’t matter if the mortgage was taken out with a broker or not, we're giving support to all our mortgage customers.

What the Charter promises

  • People worried about their mortgage repayments will be able to get in touch with their lender for advice. Where mortgage payments are up to date, there’ll be no impact on their credit file
  • Customers who are up to date with payments will be able to switch to a new mortgage deal at the end of their existing deal. There’ll be no need for another affordability check
  • Customers will be given information in good time before their current rate comes to an end, to help them plan ahead
  • Those struggling with their mortgage payments will be offered support that’s suitable for them by looking at their needs.

How we can help

If your client is up to date with their payments

Swapping to an Interest Only mortgage

  • Your clients who are up to date with current mortgage payments, can request a temporary switch to Interest Only for 6 months, without an affordability check or impacting their credit file
  • At the end of the 6 months period, clients who have maintained their payments will be automatically converted back to capital repayment
  • Requests for a repayment type change, outside of the temporary 6 months covered by the Charter, must follow the standard process
  • You must have the consent of all parties before submitting the new online form.
Please note:
  • You need to make your client aware of the implications and potential increased longer term cost of these changes
  • The online form needs to be completed by you or your client
  • As required under the Mortgage Charter, an Accord colleague will call the customer to outline the risks and provide a personalised costing, outlining the payments before completing the transaction
  • A switch to Interest Only is made on an informed choice basis and we will process the request based on the information you've submitted
  • You need to make your client aware that they will automatically be converted back to capital repayment at the end of 6 months, so they can plan for the increase in payments.

Important - please relay to your client the impact of switching to temporary interest only

If your client is considering changing their repayment mortgage to an interest only mortgage for a temporary period of six months, it is important that they understand the following information:
  • Their mortgage will automatically switch back to a repayment mortgage once the agreed six-month period has ended. At this time, their mortgage payments will be recalculated and assuming there are no other changes, their payments will increase.
  • There is no guarantee that interest rates will be lower, or the housing or financial markets will have significantly improved, and they could end up in a worse position than they are in now.
  • They will continue to be charged interest on their outstanding loan. Without capital repayments reducing their mortgage balance, they will pay more interest and increase the total overall cost.
  • Where they have the means to maintain their repayment mortgage payment and reduce the capital element, they should seriously consider doing so.
  • We cannot guarantee any further extension on an interest only basis past the agreed extension period, even if their position has deteriorated.
  • They must continue to maintain their agreed monthly mortgage payments and any missed payment could affect the arrangement which has been agreed.
  • If they are experiencing any financial difficulty, there may be more suitable options available. Please contact us to discuss.
If your client's circumstances change, it’s important that they contact us as soon as possible so we can support further.

Extending the term of a mortgage

  • Clients who are up to date with mortgage payments, can request to extend the term of their mortgage to help reduce monthly payments
  • No affordability checks are required and there’s no impact to their credit file
  • Requests for term extensions, now allowed under the Charter, should follow the current standard process using the Type Term Change application form
  • Clients who have requested a term extension under the Charter can switch back to their original term within 6 months of their request. This will be completed without affordability checks
  • Any requests to reduce the term outside of 6 months will be dealt with under the standard process and affordability checks will be undertaken
  • You must have the consent of all parties before requesting a term extension.
If you'd like to arrange a term extension, please follow the existing process below.

Important information about making these changes to a mortgage

  • If your client changes to a temporary Interest Only mortgage or extends their mortgage term, they will pay more interest and increase the total overall cost
  • If there are no other changes made to the mortgage, their repayments will increase when their payments are recalculated
  • If you extend your mortgage term past your retirement age, we may need to run an affordability check and a credit check
  • If you change your mortgage term back within 6 months, there’ll be no affordability check. It won’t affect your credit score.
If your client can afford their existing mortgage payments, they should think very carefully before making these changes and consider the longer term cost on their mortgage.

If your client's coming to the end of their current deal

They can switch their mortgage deal

Any time in the 90 days before the end of your client's deal, they can choose a new product from our existing customer range. That new rate will begin when their current deal ends. 

What if the rates fall after they've switched their deal?

Your clients can request to switch to a new rate, on a like-for-like basis, up to 14 calendar days prior to their new deal starting. It’s important to note, only the rate can change. Everything else must remain the same.

Here’s an example:
  • Current transfer product: 2 year Fixed at 75% LTV with £995 fee and Free valuation at 6.99%
  • New like-for-like request: 2 year Fixed at 75% LTV with £995 fee and Free valuation at 6.49%
A new Switch Product Request Form must be completed by you or your client once a transfer product has been booked.

Please note:
  • If a new product is chosen, we’ll cancel the existing product and issue new offer documents. If the original product transfer was submitted and accepted through the online product transfer portal, your client will not need to return the offer acceptance form in order to accept the revised offer.
  • If the previous product transfer was not submitted via the online product transfer portal, the customer will need to return the offer acceptance form before the current product maturity date.
  • We won't communicate any subsequent rate changes to your clients.
  • You must have the consent of all parties before submitting a new form.