Money Matters: Breathing space for mortgage holders
In this week's Money Matters column, Wrekin's Debt & Energy Manager Dan Bebbington discusses recently agreed measures to offer breathing space for mortgage-holders.
The Bank of England’s recent decision to increase the base rate to five per cent has caused a great amount of concern for mortgage-holders.
However, a meeting between Chancellor Jeremy Hunt and mortgage lenders means borrowers struggling to make payments will now be offered greater flexibility.
You might be wondering what these changes mean, so this week we’ll take a look at some of the “forbearance measures” which were agreed.
For starters, people having difficulty making payments will be able to move to interest-only repayments or increase their mortgage term for up to six months to lower their repayments.
Credit ratings will be unaffected if you make such a switch and you can change back to your original terms once this period is up.
Another measure will see mortgage-holders offered the opportunity to find a new fixed deal up to six months before their existing one ends.
Also, if you find a better one afterwards then you can apply for that one instead.
In terms of repossessions, some legroom has been provided, with a 12-month period agreed from your first missed payment before your home can be repossessed.
As has always been the case, discussing your options with your lender will not have a negative impact on your credit rating either.
A start date for the support arrangements has yet to be announced, but should offer some breathing space for those whose household incomes have been squeezed.
We would always encourage you to contact your bank or building society if you have any concerns about making payments.
It’s best to do this sooner, rather than later so your problems don’t escalate.
If you’re concerned that your home is at risk then it’s also worth seeking free debt advice from organisations like Citizens Advice, Step Change and the National Debt Line.
Wrekin tenants can also contact our friendly Money Matters by calling 01952 217234 or emailing money.matters@wrekin.com
6th July 2023