Mortgage lenders agree to offer more flexible support to struggling borrowers after Martin Lewis meeting with Chancellor

The new commitments from lenders were agreed at a meeting with Chancellor Jeremy Hunt today (Friday 23 June), and come after Martin's conversation with the Chancellor earlier this week. We don't yet know when the new measures will take effect.

Mortgage interest rates have risen rapidly in recent weeks, and they're expected to keep going up after the Bank of England raised the base rate from 4.5% to 5% this week. As a result, it's expected that hundreds of thousands of borrowers could face payment difficulties over the next year. 

Martin: 'I'm pleased to see it looks like the Chancellor has listened – but we need to make sure mortgage holders understand what support they can get'

The measures agreed at today's meeting

Here are the key points from the Chancellor's summit with mortgage providers:

• You'll have more flexibility to change mortgage terms. You'll be able to switch to interest-only repayments or extend your mortgage term for up to six months, lowering your monthly payments.

  Crucially, this won't have an impact on your credit rating and you'll be able to switch back to your previous terms afterwards, so you won't be locked in – this extra flexibility is something Martin has repeatedly called for.

• You'll be able to lock in a new fixed deal up to six months ahead of your existing one ending. But you won't be tied in – if a better deal comes up, you'll be able to apply for it instead. We've asked what fees, if any, will apply as part of this and will update this when we know more.

• Your home won't be forcibly repossessed for at least 12 months from your first missed payment. If you're struggling, this should hopefully give you some breathing space to sort things out.

• You'll be able to speak to your lender about your options without any effect on your credit rating. It's worth noting that this is already the case, as set out by industry regulator the Financial Conduct Authority earlier this year.

No start date has yet been announced for the new support – we've asked the Treasury and we'll update this story when we know more.

Struggling with your mortgage? Talk to your lender

Earlier this year, the FCA set out fresh guidance for lenders and made it clear that it expects mortgage providers to help struggling homeowners (including those who have and haven't missed repayments) and to be transparent about the range of options that they can consider. 

In the first instance:

1. If you're worried about keeping up with your mortgage repayments, you should contact your lender as soon as possible. Don't wait until you've missed a payment to get in touch. The earlier you reach out, the broader the range of options that could be available to you.

2. As noted above, simply reaching out to your lender to talk about your options will NOT impact your credit file or rating. Nearly 50% of struggling borrowers mistakenly believe that it will, according to the FCA's research. However, where you ultimately agree to mortgage support, this can impact your file.

For more help if you're struggling with your mortgage payments, see our full Mortgage arrears guide.