{"id":838,"date":"2023-06-24T12:22:44","date_gmt":"2023-06-24T12:22:44","guid":{"rendered":"https:\/\/260web.com\/news\/mortgages-banks-promise-more-protection-as-mortgage-rates-soar\/"},"modified":"2023-06-24T12:22:44","modified_gmt":"2023-06-24T12:22:44","slug":"mortgages-banks-promise-more-protection-as-mortgage-rates-soar","status":"publish","type":"post","link":"https:\/\/260web.com\/news\/mortgages-banks-promise-more-protection-as-mortgage-rates-soar\/","title":{"rendered":"Mortgages: Banks promise more protection as mortgage rates soar"},"content":{"rendered":"

Mortgages: Banks promise more protection as mortgage rates soar<\/p>\n

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\"Couple<\/picture><\/span>Getty Images<\/span><\/div>\n<\/figure>\n<\/div>\n
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By Kevin Peachey & Jemma Dempsey<\/div>\n
BBC News<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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Banks and building societies will offer more flexibility to struggling mortgage-holders as rates soar.<\/b><\/p>\n<\/div>\n<\/div>\n

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The move comes after bank bosses met the chancellor, Jeremy Hunt, in Downing Street on Friday.<\/p>\n<\/div>\n<\/div>\n

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Borrowers will be able to make a temporary change to their mortgage terms, then will be able to return to their original deal within six months.<\/p>\n<\/div>\n<\/div>\n

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This would allow some to have lower repayments for a short time, by just paying the interest on the home loan.<\/p>\n<\/div>\n<\/div>\n

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Mr Hunt said the six-month flexibility on switching terms would not affect credit scores as it may have done previously. <\/p>\n<\/div>\n<\/div>\n

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However, it will still be the case that missing payments or taking a total break on payments, known as a mortgage holiday, will still harm someone’s ability to borrow in the future.<\/p>\n<\/div>\n<\/div>\n

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Lenders also agreed to a 12-month delay before taking repossession proceedings against borrowers unable, or unwilling, to pay over the long term.<\/p>\n<\/div>\n<\/div>\n

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Bank chief executives described it as a “productive” meeting as they left Downing Street.<\/p>\n<\/div>\n<\/div>\n

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Earlier this week, the Labour Party issued a five point plan which it said would ease what it called “the Tory mortgage penalty” and help limit repossessions.<\/p>\n<\/div>\n<\/div>\n

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Shadow chancellor Rachel Reeves called the chancellor’s latest statement “a weak response”. <\/p>\n<\/div>\n<\/div>\n

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“Questions remain on how voluntary these measures are,” she said. “The government must offer clarity and confidence to homeowners by putting in place requirements now to reassure households.”<\/p>\n<\/div>\n<\/div>\n

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  • Five ways to save money on your mortgage<\/li>\n
  • How the interest rate rise affects you<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n
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    The meeting between lenders and Mr Hunt comes after Thursday’s shock decision by the Bank of England to raise interest rates to 5%, up from 4.5%, as it tries to tackle inflation.<\/p>\n<\/div>\n<\/div>\n

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    Millions of UK households will see their budgets squeezed as a result.<\/p>\n<\/div>\n<\/div>\n

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    The post-meeting announcement was never going to lead to direct government intervention to help those who are struggling, but it will kick-start a campaign to make them aware of their options.<\/p>\n<\/div>\n<\/div>\n

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    The idea is it encourages people to talk to their lender if they are in trouble, without feeling there are financial barriers in place to do so.<\/p>\n<\/div>\n<\/div>\n

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    Mr Hunt said: “These measures should offer comfort to those who are anxious about high interest rates and support for those who do get into difficulty.”<\/p>\n<\/div>\n<\/div>\n

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