A minimum of 1.4 million mortgage accounts have been helped by at least one of the options available in the Mortgage Charter, either explicitly or through the usual channels of business, regulator data showed.
Statistics from the Financial Conduct Authority (FCA) revealed that since being introduced in July last year, around 188,000 monthly mortgage payments were reduced as people switched to interest-only payments or extended their term.
This accounted for 2.1% of regulated mortgage contracts.
According to the FCA, just 401 term extensions have been reversed, which it said could suggest that borrowers looking for a temporary reduction to their payments were more likely to switch to interest-only.
Currently, 132,000 mortgages have reduced monthly payments because of the Mortgage Charter rules.
As of July this year, 6,247 mortgages had been switched to interest-only payments, higher than the 6,078 accounts in June. However, this was significantly down on the same month last year just after the charter was introduced and 9,659 mortgages had moved onto interest-only payments. This surged to 19,191 by August 2023.
In July, 250 borrowers requested to end the interest-only period early.
Some 3,741 mortgages had newly obtained a term extension in July, up from 3,218 in the previous month.
Also in July, 55 borrowers reversed their mortgage term extension.
The data showed that in July, some 87,669 mortgages that were approaching the maturity of their fixed rate term had locked into a new deal up to six months early. This was a jump on the 78,550 borrowers who did the same in June.
The number of borrowers who locked into a new deal six months ahead of their rate maturing then switched to an alternative option totalled 11,343 in July, up on 4,978 the month before.
Just eight properties were taken into possession in July, falling from 20 in June and 14 in May.
Since the charter was introduced, 133 properties have been taken into possession within 12 months of missing the first mortgage payment.
The FCA said lenders that reported these possessions were driven by the borrower; for example, voluntary possessions or because properties were vacant or abandoned.
The regulator said it would continue to publish quarterly data on the charter and use the findings to determine how the charter was used to inform its policy and supervisory approach.
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
