Mortgage Charter Support Measures

If you currently have a repayment mortgage (the balance will be paid off at the end of the term) you can apply to temporarily switch your mortgage to an interest only mortgage for a 6 month period or extend your mortgage term.

If you switch to interest only for 6 months:

• As you’ll only pay the interest charges during this period you will see a reduction in your monthly payment.
• You should note you won’t be reducing your capital balance during this time, meaning your monthly repayment could be higher than it is today.

If you opt to extend your mortgage term:

• Your monthly repayments will reduce
• You should note that the total amount you pay back to us will be higher
• You can opt to switch back to the original term within 6 months

We won’t carry out an affordability assessment and your credit score won’t be impacted by either of these changes.

Please note that your mortgage will come with a follow on rate that may impact these examples. In the large number of cases it will be Bank of England Base rate plus 3.14%. However most clients will opt to review their rate at maturity.

The following examples are based on a mortgage of £850,000 over with a remaining 10 year term on an interest rate of 6%.

You confirm you’ve selected to make this change to your Mortgage on a non advised basis and made use of the available calculator to understand the impact to your future payments.

You confirm that this mortgage remains affordable to you both during and after the change that you have chosen to make.

You understand the total amount of interest you’ll pay over the full term of the mortgage will be higher and that your monthly payments may increase after six months interest only or should you switch back to your original term.

If applying for a term extension, you have confirmed that your new term will not take you beyond your planned retirement age or age 70, whichever is sooner.

Making this change to your mortgage will not affect your credit score.

You understand you can not apply for a temporary change to interest only if you have had your mortgage term extended using the Mortgage Charter Support Measures.

If applying for a term extension, you have the right to request for your mortgage to revert back to the original term within 6 months of the first new payment date without needing to complete an affordability assessment.

If you are able to meet your current mortgage repayments you should continue to do so without making any changes to your mortgage.

The amount of interest you pay depends on how far into your mortgage term you  are. The reduction in your payment may not be much if you are near to the start of you mortgage.

You’re eligible to apply to make changes to your mortgage under the rules of the Mortgage Charter if:

• You have a Personal residential mortgage (not Buy to Let)
• You’re up to date with your payments and not in arrears
• Extending the term will not take you past your planned retirement age or age 70
• You have not previously applied for either a term extension or switch to interest only under the terms of the Mortgage Charter.
• You have a repayment or part interest only and part repayment mortgage. These solutions are not available for customers with interest only mortgages as they will not reduce your payments

What if I’ve been making overpayments to my mortgage?

If you’ve been making overpayments to your mortgage, you may be able to use these to reduce your mortgage monthly payment and this solution may be more cost effective than applying for a Mortgage Charter arrangement. Please contact us.

What if I need support with multiple mortgages?

You’ll need to make an application for each account that you hold. This is the case whether you have a mortgage on multiple properties or more than one account on one property.

Do I need to have held my mortgage for a certain amount of time before I can apply?

You can apply for support no matter how long you have held your mortgage

What happens after the initial 6 months?

If you’ve applied to switch to interest only, you’ll revert back to your original mortgage type after 6 months.

If you’ve applied to extend the term of your mortgage, you have the option to switch back to your original term within 6 months of applying or continue with the new extended term. If you want to make changes after the 6 months, you’ll need to go through a full application process including an affordability assessment.

What types of mortgage products are eligible

You can apply for either of the support measures irrespective of whichever mortgage product you are currently on i.e. Fixed, Tracker, SVR, Offset

When will the scheme come into effect and the first payment be debited from my account?

This will depend on when you apply for the measures and when your repayments currently leave your account. We will be able to give you a better indication once you have applied.

If I have already applied for a rate switch, can I still apply to switch to interest only? How will my rate switch be impacted?

Yes, you can still apply to switch to interest only. Your rate switch will continue to take effect at the requested time and will not be impacted by this. When the new rate takes effect, this will be the rate of interest that applies to your interest only mortgage until the 6 months from the time the application was made.

If I’ve applied to switch to Interest Only or to extend my term, can I still switch my rate?

Yes

What happens if I miss a payment when the term is extended?

Missing a payment under a Mortgage Charter arrangement is the same as missing a mortgage payment and is a breach of the conditions of your mortgage. If you're concerned that you won’t be able to make your mortgage payments, contact us right now to find out about the various ways we can help you. We’ve helped thousands of people who have money worries and we’re on hand to help you.

What happens if I miss a payment while on a temporary switch to interest-only?

Missing a payment under a Mortgage Charter arrangement is the same as missing a mortgage payment and is a breach of the conditions of your mortgage. If you're concerned that you won’t be able to make your mortgage payments, contact us right now to find out about the various ways we can help you. Please contacr us - we’ve helped thousands of people who have money worries and we’re on hand to help you.

If I have less than six months remaining on my mortgage term, can I still apply?

You need to have more than six months remaining on the mortgage term in order to apply for a temporary switch to interest-only.

Do lenders need the consent of all parties in the mortgage for a temporary switch to IO or term extensions?

Yes

Will switching temporarily to IO or extending my term impact my credit score?

No