Glossary · UK
What is Mortgage Charter?
A voluntary agreement between major UK mortgage lenders and the government setting out support options for homeowners struggling with repayments, such as switching to interest-only or extending the term temporarily.
Full Definition
The Mortgage Charter is a voluntary agreement, signed by most major UK mortgage lenders in 2023 following a period of sharply rising interest rates, setting out a common set of options lenders will offer struggling borrowers before considering repossession. Under the charter, signatory lenders commit to letting customers up to date with payments switch temporarily to interest-only payments or extend their mortgage term to reduce monthly payments, without a new affordability check or any effect on their credit file, with a right to reverse the change back to the original terms within a set period if circumstances improve. It also commits lenders to a minimum period (typically 12 months) before starting repossession proceedings from the first missed payment, except in exceptional circumstances, and to offer tailored support to anyone struggling, whether or not they have missed a payment yet. Because the charter is voluntary rather than a legal requirement, its exact terms and the set of signatory lenders can be checked on the government's or a lender's own website, and it does not override a lender's normal regulatory obligations to treat customers in financial difficulty fairly under FCA rules.