The government has secured fresh commitments from major lenders to step up engagement with mortgage customers as fixed-rate deals come to an end.
The Chancellor, Rachel Reeves, and the Economic Secretary have met with the UK’s six largest banks and building societies, alongside UK Finance, to assess the impact of geopolitical tensions on households and small businesses.
Following the discussions, lenders have committed to proactively contacting around 1.6 million borrowers whose fixed-rate mortgage deals are due to expire before the end of the year. The outreach is intended to ensure customers are made aware of their options, or can access tailored support, well in advance of any change in their monthly payments.
The Chancellor also reiterated the government’s backing for the Mortgage Charter, reaffirming the existing framework designed to support borrowers facing higher costs.
The Charter allows customers to secure a new mortgage rate up to six months ahead of expiry and switch to a new deal with their existing lender without undergoing a fresh affordability assessment. It also provides short-term relief measures, including the option to move to interest-only payments for six months, with any support discussions not impacting credit scores.
Industry data shared during the meeting suggested that while more borrowers are seeking guidance, overall lending activity remains stable and arrears levels continue to be low. With around 86% of mortgages currently on fixed rates, most households are insulated from immediate fluctuations in market conditions.
Reeves said: “In uncertain times, people need clear reassurance and practical help. That’s why I’ve brought the biggest lenders together to step up support and make sure anyone who is worried can access the Mortgage Charter options quickly, without their credit score being affected.”
Damien Burke, head of regulatory practice at Broadstone, said: “This is a positive step that should help borrowers better understand their options well before their fixed-rate deals end, which can make a significant difference in helping households plan and manage higher repayments.
“At a time of macro-economic uncertainty, proactive communication and early engagement are often the most effective ways to provide reassurance and prevent short-term payment pressure from turning into longer-term financial difficulty.
“From the lenders’ perspective, the main challenge will be operational in contacting a large number of customers and providing meaningful, tailored support. I think its another clear use case for utilising ongoing, tailored, individual affordability assessments and flexible payment options to provide tailored, targeted support in an efficient manner.”
The latest intervention underscores the government’s focus on maintaining stability in the mortgage market, with lenders expected to balance operational capacity with the need to deliver personalised support at scale.
