In June 2023, the FCA introduced new rules to support the Government’s Mortgage Charter’s commitments, including providing for firms to allow customers to make reduced capital payments for up to 6 months, or reverse term extensions within 6 months, without taking an affordability assessment. The FCA has now published data from the 48 firms who have signed up to the Charter.
Representing around 90% of the mortgage market, key findings from the data includes:
- at least 760,000 accounts benefited from one or more of the options set out in the Charter;
- monthly payments have been temporarily reduced for around 90,543 mortgage accounts via the new FCA rules;
- between July 2023 and January 2024, monthly payments were reduced for around 123,000 accounts a a result of temporarily paying interest-only or extended their mortgage term, around 1.4% of regulated mortgage contracts. 103 term extensions were reversed, indicating that borrowers seeking a temporary reduction in their payments are more likely to opt for an interest-only period;
- 67 properties were repossessed within 12 months of missing the first payment. Firms have reported that these were for customer-driven reasons, such as voluntary possessions or abandoned properties.
Data will be published quarterly, with future updates due to include a summary of how accounts that have received support are performing.