OVER 30 lenders have signed up to a new mortgage charter to help offer struggling households more support from next week.
The providers represent around 85% of the mortgage market giving new hope for millions.
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It will mean that from July 10, customers approaching the end of a fixed-rate deal will have the chance to lock in a deal up to six months ahead.
Sarah Coles, head of personal finance at Hargreaves Lansdown said: “Plenty of mortgage lenders already let you lock in a mortgage rate six months in advance.
“However, having the certainty that your lender will definitely allow it will ease some remortgage anxiety.”
Here’s a full list of lenders who have signed up to the Mortgage Charter and will allow customers to lock in a fixed deal for six months from July 10:
- Barclays
- NatWest, including RBS and Ulster Bank
- Lloyds, including Halifax and Scottish Widows
- Nationwide Building Society
- HSBC, including First Direct
- Santander
- Virgin Money, including Clydesdale Bank and Yorkshire Bank
- TSB
- Scottish Building Society
- Buckinghamshire Building Society
- Newcastle Building Society
- Hinkley & Rugby Building Society
- Nottingham Building Society
- Principality Building Society
- Suffolk Building Society
- West Bromwich Building Society
- Loughborough Building Society
- Family Building Society
- Coventry Building Society
- Yorkshire Building Society
- Skipton Building Society
- Leeds Building Society
- Bath Building Society
- Ecology Building Society
- The Vernon Building Society
- Leek Building Society
- Furness Building Society
- Melton Mowbray Building Society
- Glasgow Credit Union
- Darlington Building Society
- Progressive Building Society
However, experts remain uncertain over whether or not this measure will protect people from rises in the future.
This is because lenders have already priced a number of deals into the market already.
Sarah said: “An awful lot of rate rises being forecast are already priced into the market.
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“If we get all of these rises, and inflation still refuses to budge, then having secured a rate could be invaluable.
“However, this isn’t widely expected. In fact, we may not get all the rises that are currently being priced in.”
However, even if a borrower was to secure a mortgage deal now, locking in a rate in advance doesn’t mean you’re obliged to still with it.
Homeowners will also be able to manage their new deal and request a better like-for-like deal with their lender right up until their new term starts if one is available.
But this only one part of a raft of support measures now outlined in the Mortgage Charter.
The scope of the agreement also means that any homeowner can approach their participating bank or mortgage lender for advice on repayments without impacting their credit score.
Homeowners will be able to change their mortgage to interest only and extend the terms of their loan.
But if homeowners then want to go back to their original plan within six months they will be free to do so.
The new rules also stipulate that a borrower will be forced to leave their home without their consent unless in exceptional circumstances, in less than a year from their first missed payment.
Banks and building societies have also been instructed by the government to deploy highly trained staff to help customers to ensure that tailored support is given to anyone struggling.
The measures come after the Bank of England upped the base rate from 4.5% to 5% last week in a bid to slow soaring inflation, which stood at 8.7% in May.
But while the measure is designed to make the cost of everyday essentials cheaper, a higher base rate is passed on to mortgage owners.
The rise means homeowners on tracker or standard variable rate mortgages are likely to see their monthly repayments spike soon.
Meanwhile, anyone coming to the end of a fixed deal over the next year will find their payments have shot up when it comes to remortgaging.
Rapid interest rate rises have placed homeowners under huge pressure, with many arguing they can no longer afford their house.
The average rate on a two-year fixed deal has now soared to 6.19%.
And a typical five-year fixed deal has hit 5.82%.
What other help is already available?
As soon as you think you will have a problem with your monthly mortgage repayment – whether you can’t pay anything, can’t pay all of your monthly payment or can’t pay it on time – get in touch with your lender straight away.
They have certain schemes in place to help you if you’re struggling.
But if you’re looking for extra support on top of this, there are a number of other options available to you.
Cost of living cash
A range of cost-of-living support is available. People can visit the helpforhouseholds.campaign.gov.uk for more information.
Millions are also in line to receive cost of living payments worth up to £1,350.
The first instalment of the £900 payment has been paid to millions on certain benefits, including Universal Credit and Pension Credit.
Meanwhile, a £150 payment and between £150-£300 payment will be made to millions with disabilities and pensioners from June 20.
Welfare Assistance schemes
Many local councils have Welfare Assistance schemes to help struggling families.
Help available varies, but you could get free cash, food vouchers, and help for bills like rent and energy.
Check with your council to see whether you are eligible and what you can claim.
Household Support Fund
This is another scheme you can access through your local council.
It’s designed to help those in most need with payments towards the rising cost of food, energy, and water bills.
Check with your council directly to see what’s on offer as some share money with charities which can then give you cash or food vouchers.
Some councils restrict how often you can apply for money through this scheme to once a year, so double-check.
Check your benefits entitlement
Even though the government is stopping much of the cost of living help currently on offer, some people will still be able to get financial support.
If you claim pension credit, income support or universal credit you may be entitled to further cost of living payments.
Depending on other tax credits or benefits you already get, you could get either three or five further payments.
You can find free-to-use online benefits calculators to work out what you’re entitled to.
Entitledto’s free calculator works out whether you qualify for various benefits, tax credits and Universal Credit.
Debt charity StepChange also has a benefits checker which is free to use and won’t record your results.
Make sure you have key financial information to hand, such as bank and savings statements, and information on pensions and existing benefits.
If you live with a partner or family, get their basic financial information together too as this could affect your claim.
Support for mortgage interest
Support for mortgage interest or SMI helps those on Universal Credit – and other benefits – by giving them a low-interest loan.
The help goes towards mortgage payments or towards loans taken out to help repair any damage to the home.
SMI is a loan that you will need to repay with interest when you sell your home.
You’ll get help paying the interest on up to £200,000 of your loan or mortgage.
But you’ll only get up to £100,000 if you’re getting Pension Credit.
The interest added to the loan can go up or down, but the rate will not change more than twice a year – the current rate is 3.03%.
Contact the office that pays your benefit to find out if you could get an SMI loan.
