Mortgages: Interest Rates

Treasury written question – answered at on 6 September 2023.

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Photo of Andrew Rosindell Andrew Rosindell Conservative, Romford

To ask the Chancellor of the Exchequer, what steps his Department is taking to help support homeowners who are unable to make mortgage payments following increases in interest rates in the last 12 months.

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

The pricing of mortgages is a commercial decision for lenders in which the Government does not intervene. However, we recognise this is a concerning time for mortgage borrowers.

On Friday 23 June the Chancellor met with the UK’s largest mortgage lenders, UK Finance and the Financial Conduct Authority to discuss how lenders will provide support for those who encounter problems keeping up with their mortgage payments. At this meeting, lenders agreed to a new Mortgage Charter to support borrowers struggling with their mortgage payments that was published on 26 June. The Charter sets out the standards signatory lenders will adopt when helping their customers, including new flexibilities to help customers manage their mortgage payments over a short period.

The Charter is in addition to the significant safeguards already in place for consumers in the mortgage market. Financial Conduct Authority rules require lenders to engage individually with their customers who are struggling or who are worried about their payments in order to provide tailored support. The Government has also taken measures aimed at helping people to avoid repossession, including Support for Mortgage Interest (SMI) loans, and protection in the courts through the Pre-Action Protocol.

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