Money-saving expert Martin Lewis has advised those struggling with mortgage payments to speak to their lenders as they announced plans to support customers during the cost-of-living crisis.
Rising costs and interest rates across the economy are a major cause of concern for consumers in many areas, and the Government understands that mortgage borrowers may be particularly worried about increases to their monthly payments.
Jeremy Hunt, Chancellor of the Exchequer, has met leaders of the UK’s major mortgage lenders, the chairman of the Financial Conduct Authority (FCA), and Lewis to discuss what support could be available.
Lewis, founder of MoneySavingExpert.com, said: “The major concern for people’s mortgages – and the knock-on impact of mortgage increases on rents – is the situation in the spring, when we expect interest rates to be higher, energy prices to be rising, and other cost of living impacts.
“So the most important thing is that now the conversations have started about what flexibility and forbearance measures can be put in place to help those struggling. For those worried about making mortgage repayments, the sooner you communicate with your lender the better.”
Lenders’ commitments
At the meeting, lenders committed to help all their customers by:
- enabling customers who are up to date with payments to switch to a new competitive, mortgage deal without another affordability test.
- providing well-timed information to help customers plan ahead should their current rate be due to end.
- offering tailored support to those who start to struggle with payments which will vary by lender, but may include extending the term of the mortgage to make monthly. payments lower, a short-term reduction in monthly payments or accepting interest-only payments for a period where appropriate.
- ensuring highly trained and experienced staff are on hand to help where needed.
The Government has confirmed action to make Support for Mortgage Interest easier to access, as well as record levels of funding for the Money and Pensions Service to provide debt advice in England.
Sound money and a stable economy are the best ways to deliver lower mortgage rates, more jobs and long-term growth.
Mortgage lenders, the FCA and the Government will continue working closely together to ensure that the mortgage market works well for all homeowners, in particular those facing financial difficulty. Discussions will continue to take place with lenders on what more they are able to do to inform and support their customers going forward.
What the lenders say
David Duffy, CEO of Virgin Money, said: “We know that many of our customers will have to make difficult decisions in the current economic environment, and we are being proactive in offering our support to those in need.”
Matt Hammerstein, CEO of Barclays UK, added: “We are committed to helping every borrower manage their repayments while adjusting to the current environment. The announcements made by the Government and mortgage lenders to ensure support is available for those who may or do encounter challenges making mortgage payments, both now and in the future, are a critical part of that.
“At Barclays, we always work with our customers to find any feasible way to keep them in their home, which is why we have a dedicated team who are trained to offer dedicated and tailored support to each individual borrower, using a wide range of support options.”
If you are having financial concerns, talk to us for advice.