Mortgage Charter

In June 2023, the UK Government introduced a Mortgage Charter. It’s been set up to give customers with residential mortgages extra support if they’re worried about keeping up with their payments. A campaign has also been launched by UK Finance, which encourages customers to ‘Reach out’ to their lender when they need help.

You can choose from three types of support:

  1. Apply to switch to a new mortgage rate up to six months before your current deal ends
  2. A temporary switch to interest only payments for six months
  3. Extend your mortgage term.

You can apply for support with no affordability or credit checks needed. This means we won’t assess your income or outgoings and your credit score won’t be negatively affected.

We also won’t repossess your home within 12 months of missing your first mortgage payment if your account isn’t brought up to date.

You won’t be able to apply for Mortgage Charter support if:

  • Your account is in arrears
  • You need help with your Buy to Let mortgage.

Don’t worry though – we can help you in other ways. Visit our help and support page if you’ve unpaid mortgage payments outstanding or think you’ll struggle to make your next payment.

You could benefit from getting a new deal if you’re a landlord whose payments are up to date and your mortgage is on a variable rate, or a fixed rate that ends within the next six months.

What does a switch to a new mortgage rate mean for me?

If you have a fixed rate mortgage with us, your payment is set at a specific interest rate for a certain period. This can be good for budgeting as your payments will stay the same during that time. It does mean you won’t benefit if the Bank of England Base Rate or our Standard Variable Rate decreases.

When your fixed period ends, you’ll move on to a variable interest rate. This rate will link to the Bank of England Base Rate or our Standard Variable Rate. This means if the rate your mortgage links to goes up or down, so will your payments.

Currently, you can apply to take out a new fixed rate if you’re within six months of your current mortgage deal ending. The new rate will take affect when your current deal ends.

You may also apply if you’re already on a variable rate depending on the terms of your mortgage.

 

Can I switch my rate and temporarily switch my mortgage to interest only at the same time?

It’s not possible to make both changes at the same time. You can switch your rate up to six months before your fixed rate ends or if it’s already ended. You’ll need to apply to switch your rate first – then once you’ve made a payment on the new rate, you can apply to temporarily switch your mortgage to interest only.

To work out how much your interest only payments might be on a new rate:

  • See what rates you can choose from using the rate links below
  • Open the interest only calculator
  • Enter your mortgage details, but in the What is your current mortgage interest rate? field, enter the interest rate you want to switch to
  • You can try different interest rates to see which is best for you.

 

How do I know what rates are on offer?

The rates on offer will depend on which brand you took your mortgage out with. Take a look at our Bank of Ireland rates or Post Office rates to see what’s available. Use our calculator to work out how switching to a new rate could affect your monthly payment.

Calculate payments

 

How do I apply to switch my mortgage rate?

You can apply for a new rate:

  • With a recommendation. We’ll fully assess your circumstances and suggest a rate that we think best suit your needs
  • Without a recommendation. We won’t make any assessment and you’ll choose a rate which you think is best for you. Please read our Execution Only Disclosure (PDF) for more details.

If you prefer, you could talk about your options with a mortgage broker instead.

We can withdraw our rates at any time and without notice.

Apply now

 

What if I’ve applied to switch my rate and a better deal becomes available?

When you’ve applied for a new rate, you can change your deal or cancel your request up to two weeks before your new rate is due to start. Just get in touch to let us know.

We can withdraw our rates at any time and without notice.

What does a switch to interest only mean under the Mortgage Charter?

You should continue to make your current mortgage payments if you can afford to, as temporarily switching to interest only will cost you more in the long run.

You can apply for a switch to interest only for six months if you want help with your residential mortgage payments and:

  • You’ve at least one year before you pay off your mortgage
  • All or part of your mortgage is on repayment
  • You’ve made your first mortgage payment
  • Your account isn’t in arrears.

Switching to interest only payments means that your monthly payment will be lower as you’ll only pay the interest charged on your mortgage balance (the capital). Your balance outstanding will stay the same during this time.

Once the six-month period has ended, your mortgage will automatically go back on to repayment. Your payments will be higher than before as it will include the capital that you didn’t pay whilst your mortgage was on interest only. We’ll spread this over the rest of your mortgage term.

The interest you’ll pay back overall will also be more, so the total cost of your mortgage will be higher.

We don’t recommend which support under the Mortgage Charter is best for you.

You should think about switching to a new mortgage rate if you’re on a variable rate or a fixed rate that’s due to end within the next six months.

 

Can I temporarily switch my mortgage to interest only and switch my rate at the same time?

It’s not possible to make both changes at the same time. You’ll need to apply to switch your rate first – then once you’ve made a payment on the new rate, you can apply to temporarily switch your mortgage to interest only.

To work out how much your interest only payments might be on a new rate:

  • See what rates you can choose from using the rate links on the switching tab
  • Click on ‘Calculate payments’ below to open the interest only calculator
  • Enter your mortgage details, but in the What is your current mortgage interest rate? field, enter the interest rate you want to switch to
  • You can try different interest rates to see which is best for you.

 

How much would a temporary switch to interest only cost me?

We recommend using our calculator to understand how a switch to interest only for six months could affect your mortgage.

Calculate payments

 

How do I apply?

You can only apply directly through us. Choose one of the following:

  1. Send us a request online.

    Apply online
  2.  

  3. Send us a request by post.

    Please read our Execution Only Disclosure (PDF) before completing the form. It explains what it means to request a change to your mortgage without any recommendation from us.

    Download form

    Don’t have a printer? Don’t worry. You can ask us to post you one. Please allow up to five working days to send you the form.
  4.  

  5. Call us on 0345 300 8000*, then press option 6.

 

What happens if I still struggle to make payments during or after the interest only period?

You should contact us straight away. Visit our help and support page for details.

What does extending my term mean under the Mortgage Charter?

You should continue to make your current mortgage payments if you can afford it as a term extension will cost you more in the long run.

Extending your term will make your monthly payment lower as it will take you longer to pay off your mortgage. However, it means you’ll pay more interest overall so the total cost of your mortgage will be higher.

You can apply to extend your term if you want help with your residential mortgage payments and:

  • Your mortgage is currently on a repayment basis. This is because your payment wouldn’t change if your mortgage were on interest only
  • You’ve made your first mortgage payment
  • Your account isn’t in arrears.

Some things to be aware of:

  • We’ll change the term for both your accounts if you have a mortgage currently on part interest only and part repayment basis. Your interest only payments will stay the same
  • You can increase your current term up to 35 years from the date your mortgage started
  • The new term must not take the eldest borrower past 75 years of age or their expected retirement age, whichever is earlier.

We don’t recommend which support under the Mortgage Charter is best for you.

You should think about switching to a new mortgage rate if you’re on a variable rate or a fixed rate that’s due to end within the next six months.

 

Can I reduce my term again in the future?

Under the Charter, you can choose to go back to your previous term within the first six months. There will be no affordability checks and your credit score won’t be negatively affected. Your payments will be higher than before as you’ll have paid less off your mortgage balance during the extension period.

You’ll need to tell us if you want to change your term back. You can message us from your hub or call us on 0345 300 8000*.

We’ll need to make sure your payments are still affordable if you want to reduce your term after the first six months. We’ll assess your circumstances and carry out a soft credit check, which won’t affect your credit score.

How much would a term extension cost me?

We recommend using our calculator to understand how a term extension could affect your mortgage. You can enter different term lengths to see which term is most suitable for you.

Calculate payments

 

How do I apply?

You can only apply directly through us. Choose one of the following:

  1. Send us a request online.

    Apply online
  2.  

  3. Send us a request by post.

    Please read our Execution Only Disclosure (PDF) before completing the form. It explains what it means to request a change to your mortgage without any recommendation from us.

    Download form

    Don’t have a printer? Don’t worry. You can ask us to post you one. Please allow up to five working days to send you the form.
  4.  

  5. Call us on 0345 300 8000*, then press option 6.

  • Can I apply for more than one of the support measures under the Mortgage Charter?

    You can apply to switch your mortgage rate up to six months before your current deal ends. You may apply if you’re on a variable rate too, depending on the terms of your mortgage.

    If your current fixed rate is due to end soon, and you have a:

    • Temporary switch to interest only in place, you must wait for the interest only period to end before you can apply for a new rate
    • Term extension in place, you must make your first payment on your new term before you can apply for a new rate.

     

    You can apply for a temporary switch to interest only payments and a term extension, but you can’t apply for both at the same time. You can apply for each of these measures once. You should read how each option could affect you as we don’t recommend which is best for you. You can talk this through with a broker if you’re not sure.

  • How will using one of the Mortgage Charter measures affect my credit record?

    None of these measures will negatively affect your credit score. Once your request is in place, we’ll let the credit agencies know about your new monthly payment and switch to interest only or change of term. You’ll see these changes on your credit record one month after they’ve been made. If you temporarily switch to interest only, we’ll update your credit record when your mortgage switches back to repayment.

  • My account is already in arrears what can I do?

    You won’t be able to apply for help under the Charter, but we do already have support available. The earlier you contact us the sooner we can get you back on track.

    We have an experienced team who deal with borrowers facing financial difficultly. They’ll explore what choices you have and aim to find one suited to your needs.

    Visit our help and support page for more information or call 0345 300 8000* and select option 1.

  • What happens if I fall into arrears after switching my rate or I’ve temporarily switch to interest only or extended my term?

    You’ll fall outside the Charter rules and will follow our standard arrears process. This means:

    • We’ll report the missed payments which will affect your credit score
    • We’ll follow our normal arrears process – we’ll send letters about the overdue payment(s) and try contacting you to talk about how we can help you to bring your account up to date using ways outside of the Charter
    • If you extend your mortgage term, you won’t be able to go back to your previous term without any affordability checks. This may also affect your credit score
    • If you apply for a temporary switch to interest only payments, your account will still revert to repayment after six months making your payments higher.

     

    You should get in touch as soon as you can if you fall into arrears so we can look at other ways we can help you. Call us on 0345 300 8000* and select option 1.

  • Can I get Mortgage Charter support if I had my mortgage through a Help to Buy or NICHA (Northern Ireland Co-ownership Housing Association) scheme?

    You must obtain consent from Homes England or the NICHA scheme before applying for a temporary switch to interest only payments or a term extension.

  • Can I get help under the Mortgage Charter if I’m letting my residential property out?

    You can only switch to a new rate if you apply for a Buy to Let mortgage. You and your property must meet our lending policy.

    You can apply for a temporary switch to interest only payments or a term extension if you have our approval to let out your property.

    If you don’t have our approval, visit our letting your residential property page. You’ll need our consent before we can put any help under the Charter in place.

  • Can I get help under the Mortgage Charter if I’m living abroad?

    We’ll need to speak with you. Please get in touch or give us a call on 0345 300 8000*.

  • I’ve had help from you under the Mortgage Charter. Will changes to the Bank of England Base Rate or your Standard Variable Rate affect my payments?

    Depending on which of these rates your mortgage is linked to, your payments will still go up or down if you’re on a variable rate and you’ve had either:

    • A temporary switch to interest only for six months
    • An extension to your mortgage term.

    Your payments will stay as they are now if you have a fixed rate mortgage.

    You’ll find the details of your mortgage in your hub or in your most recent mortgage Offer.

 

* Calls are recorded for training and monitoring purposes. Lines are open 9am – 5pm Monday to Friday. We’re closed on Bank Holidays. 03 calls cost no more than calls to geographic numbers (01 or 02). Calls from landlines and mobiles are included in free call packages.

 

Your property may be repossessed if you do not keep up repayments on your mortgage