FCA publishes Mortgage Charter uptake data

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.

Harry Wells