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.
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.
If your client would like to take this option, please complete the form below.
What if 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%.