(Updated 31 October 2023)

Government Mortgage Help

government mortgage help

As interest rates continue to rise, the mortgage market has taken the brunt with the average five-year fixed-rate mortgage rate in the UK rising to 5.79%, according to USwitch.

With many struggling to pay their mortgage and others concerned about how their mortgage payments will jump at the end of their current fix, the UK Government have been forced to step in, announcing new support measures for mortgage holders. Here, we look at the Government mortgage help and how it could affect you.

Government Mortgage Help

At the end of June the Chancellor, Jeremy Hunt, met the Financial Conduct Authority (FCA) and the UK’s principal mortgage lenders to discuss support for people struggling with their mortgage repayments. Here, they agreed to a new package of forbearance measures intended to ease the burden on homeowners.

These include:

  • Lenders must deploy highly trained staff to provide information and support if consumers are worried about their mortgage payments, without this impacting their creditworthiness.
  • Not forcing customers to have their homes repossessed within 12 months from their first missed payment.
  • Offering customers approaching the end of a fixed-rate deal the chance to lock in a deal up to 6 months ahead. They should also allow consumers to apply for a better deal up until the start of their new term.
  • The FCA, lenders and the government will permit customers to switch to an interest-only mortgage for 6 months. Alternatively, customers can extend their mortgage term to reduce their monthly repayments and then switch to their original term within the first six months. Either of these options can be taken out by consumers without affecting credit worthiness or without a new affordability check.
  • Lenders will provide well-timed information to their customers whose current rate is about to end so that consumers can plan ahead.
  • Providing support for customers who are up-to-date with payments to switch to a new mortgage deal at the end of their existing fixed-rate deal without another affordability check

Has my mortgage provider signed up to these measures?

While these changes are not mandatory, all the main lenders have now signed up to the agreement. This therefore means that over 85% of the UK mortgage market will be covered by these changes.

The FCA expects these changes to become common industry practice so it is likely that all lenders will follow suit. You can see the full current list of lenders who have signed up to the agreement here.

Will the new mortgage measures help?

All of the agreed upon measures aim to show forbearance from lenders to mortgage holders and ensure that those struggling with their mortgage repayments have somewhere to turn for information and support without it impacting their credit score.

While all of this is of course helpful for consumers, questions have been raised over whether this help is enough and how it will actually impact consumers.

The measures do help consumers to readjust their finances and plan ahead for their mortgage repayments, however, the measures do not reduce the payments themselves. This means that many consumers still face higher repayments with some unable to afford these amounts.

Struggling to pay your mortgage repayments?

As a priority debt, your mortgage requires urgent attention.

If you find yourself struggling to pay your mortgage it’s important to know that there is help at hand. In the first instance, you should contact your mortgage lender and see if there is anything they can do to make your payments more manageable.

If you have fallen behind with your mortgage payments and find yourself falling into problem debt, our free, no-obligation debt advice service can help you understand what your options are. Our debt advice service is available 24/7, and can be accessed via our online tool, by phone, WhatsApp or email.

We will give you more information about the options available to you going forward, and should you decide to progress with a debt solution with us, fees will apply.

Don’t have an account with us and are looking for debt advice?

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Angel Advance provides online debt advice to get you back on track and make your finances more manageable.

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