Mortgage Charter
Alongside our comprehensive range of existing support options, we are also a signatory to the Government's Mortgage Charter. This means we've introduced even more ways to support your clients who may be worried about how mortgage rates could affect them over the coming months.
These measures include the option for clients to:
- Arrange a new deal up to 6 months before their current deal ends. They can change their mortgage deal within the 6 month period, right up until the new term starts, should they find a better like for like deal with us;
- Temporarily change to Interest Only, where they will be able to only pay the interest on their mortgage for 6 months; or
- Extend their current mortgage term to reduce monthly payments, with the option to revert back to their original term within 6 months. Term extensions must not go beyond the earliest expected retirement age (maximum 68 years) or 40 years from when you originally took out the mortgage.
All options within the Mortgage Charter will not require an affordability check or have an impact on your client's credit file.
The most commonly asked questions regarding the Mortgage Charter, and their answers, are detailed below.
What is the Mortgage Charter?
The Mortgage Charter is a new agreement between lenders, the Financial Conduct Authority, and the Government, which permits customers to switch to an interest only mortgage for 6 months, or extend their mortgage term to reduce their monthly payments and switch back to their original term within the first 6 months. Both options can be taken without a new affordability check or affecting their credit file. In addition, from 26 June 2023, customers won't be forced to have their homes repossessed within 12 months from their first missed payment.
Who is eligible to take up the Mortgage Charter?
UK residential mortgage customers, who are up to date with their mortgage payments, are eligible for the Mortgage Charter.
Who is excluded from the Mortgage Charter?
Customers with accounts in Gibraltar and Jersey, or who meet the following criteria: currently in arrears, have a buy-to-let or equity release product, have bridging or second charge loans, or have less than 12 months remaining on their mortgage term are excluded from the Mortgage Charter.
My client's mortgage has expired and would like to go on interest only for 6 months or consider a term extension, what do I do?
The product transfer and 6 months' interest only, as part of the Mortgage Charter, will work independently of each other. You can complete the product transfer with your recommended product, and your client can submit a form through our mortgage payment options page with their Charter requirements, either 6 months interest only, or a term extension. Our commitment to support the Mortgage Charter is to help our customers who need some extra help. This is separate from any broker advice and ensures we can make the changes quickly.
Where will my client find out how much everything will cost?
If you are completing a product transfer, the illustration you create through your preferred sourcing system will confirm the new monthly payment. If any part of the mortgage has a variation through the Mortgage Charter, we will provide your clients with all the details they will need to make the right decision for them and confirm any new monthly payment.
How will my client's credit file be affected by choosing interest only or a term extension?
As part of our pledge and commitment to support the Mortgage Charter, your client's credit file will not be impacted by going on to interest only for 6 months or extending their mortgage term to reduce monthly payments as part of the Mortgage Charter.
I am going through my mortgage maturities; what can I advise my clients?
The product transfer will not be affected if your client is thinking about making any changes as part of the Mortgage Charter, and you will be able to advise your client based on their circumstances and the product you recommend. If your client would like more details about the Mortgage Charter, they will be able to find the details here: Charter - GOV.UK (www.gov.uk)
How early can I do a product transfer?
You can reserve a new product up to 6 months before maturity. For full details on our product transfer process, please see our website: Mortgage Product Transfers Newcastle Intermediary Services (newcastleis.co.uk)
Do I still get a procuration fee if my client does a product transfer and extends the term under the Mortgage Charter?
If you complete a product transfer, we will pay 0.2% gross. For your client to have any variation to their mortgage under the Mortgage Charter, they will need to visit mortgage payment options on our website and submit a form with their requirements. We are happy for you to complete the product transfer independent of any changes under the Mortgage Charter.
What if I chose a rate for my client, and the rates go down?
The cooling-off period for a product transfer is the entire offer period, and you may change products within this time. It is only after completion of the new product that any ERC will incur, should your client want to change.
What will happen if my client would like to have interest only longer than the initial 6 months?
Under the Mortgage Charter, we are offering an initial 6 months on interest only with no affordability or additional checks. We will continue to support those customers affected and will continue to review our policy in line with those changes and support customers who need additional help under the Mortgage Charter. If after 6 months of interest only your client is still struggling they will need to speak to our Mortgage Support team on 0345 702 3083 about the options available to them.
Is there any information I can give my client about the Mortgage Charter?
Information about the Mortgage Charter and our support can be found on our website: Mortgage payment options (newcastle.co.uk)
While, information on the Mortgage Charter and lenders who have made a commitment to support it, can be found here: Mortgage Charter - GOV.UK (www.gov.uk).
What is the telephone number my clients need to call if they want to change their mortgage as part of the Mortgage Charter?
If your client would like to go through their options as part of the Mortgage Charter, all information including the form to request changes can be found on our mortgage payment options page. Alternatively, we have a dedicated Mortgage Charter phone line should they wish to speak to one of our colleagues on 0345 602 0819, available Monday to Friday from 8am - 6pm.
My client is in arrears, can they change their mortgage as part of Mortgage Charter?
If your client is currently in arrears on their mortgage, they will need to contact our Mortgage Support Team on 0345 702 3083 to discuss the options we have available to them. They will not be eligible to take up the Mortgage Charter.
Am I able to process the Mortgage Charter request on behalf of our mutual customer?
No, the client will need to fully complete their request for a mortgage variation. This can be found with all supporting literature at www.newcastle.co.uk.
Am I eligible for a procuration fee for processing a Mortgage Charter request on behalf of our mutual customer?
No, you would not be eligible for a procuration fee for processing the Mortgage Charter request.
Will Newcastle Building Society be providing any advice to our mutual client about the Mortgage Charter?
No, the Mortgage Charter is an execution only process.
Am I able to change our mutual client's product before the new scheme commences?
Yes, please follow our non-automated product transfer process. We will review a new ESIS document and a completed Customer Authority Form to finalise the request. This should be returned to schemetransfer@newcastle.co.uk.
For more information on the government's Mortgage Charter, please click here.
If your client is struggling with their finances and need additional help from us, further information and support can be found on the mortgage payment difficulties page of our consumer website, including how to access our Helping Hand service. Helping Hand is a partnership with Citizens Advice Gateshead to deliver a dedicated service for our members allowing them to access free expert advice and support if they need help.
If you have any queries or would like to discuss a case, please talk to your dedicated Business Development Manager or contact the Intermediary Support Team at Intermediary.lending@newcastle.co.uk.