Lloyds is reminding homeowners approaching the end of their fixed-rate mortgage deals that a range of support options are available, as around one million low-rate fixed mortgages are expected to mature across the UK this year.
The lender said it continues to see relatively low levels of customers asking for help or falling behind on mortgage payments, but is encouraging anyone concerned about higher repayments to engage early with the support available.
According to Lloyds, more than 80% of its mortgage customers are currently on fixed-rate products, meaning the majority are insulated from recent changes in mortgage pricing until their existing deal expires.
The bank said around two-thirds of customers whose fixed-rate deals end this year are on two-year products taken out in 2024. These borrowers are likely to see similar, or in some cases lower, monthly payments if they switch to a new deal today. However, customers coming to the end of five-year fixed-rate mortgages agreed in 2021 are expected to face higher borrowing costs.
Lloyds said it continues to offer a range of mortgage products across different loan-to-value bands and fixed-rate terms for first-time buyers and customers remortgaging to the bank.
EARLY CONTACT WITH CUSTOMERS
The lender said it begins contacting customers around four months before their current mortgage deal expires, using digital notifications, letters, emails and text messages to encourage them to arrange a new rate before moving onto its Homeowner Variable Rate.
Customers can secure a product transfer up to four months in advance and, if rates fall before the new deal starts, they are able to switch to the lower rate. Product transfers can be completed through the Lloyds app, online banking, by speaking to bank colleagues or via mortgage intermediaries.
Customers who move onto the Homeowner Variable Rate without selecting a new deal continue to be contacted to ensure the arrangement remains appropriate for their circumstances.
SUPPORT FOR CUSTOMERS EXPERIENCING DIFFICULTY
Lloyds said it continues to provide support under the Mortgage Charter, including options to help customers reduce their monthly repayments by temporarily switching to interest-only payments or extending their mortgage term.
The lender also allows customers who are already in arrears to transfer onto a lower mortgage rate where appropriate. Lloyds said any support offered is subject to affordability and eligibility assessments, with solutions tailored to individual circumstances.
In addition to payment support, the bank said it has dedicated processes for customers facing significant life events such as serious illness or bereavement. It also works with organisations including StepChange to signpost customers to free, independent debt advice where wider financial support may be needed.
Andrew Asaam, mortgages director at Lloyds Banking Group, said: “We want to reassure customers that we have a range of options and support available no matter their situation.
“We know most people like the certainty of a fixed rate, and we’ve made it as easy as possible for people to take action well ahead of their current deal is coming to an end.
“For anyone that is worried, our specially trained colleagues are ready to help, with ways to reduce monthly payments or identify additional support for those needing support with their finances beyond their mortgage.”
