Data collected by the Financial Conduct Authority (FCA) on the use of the government’s Mortgage Charter showed this was a fall from the 489,000 people who switched early in the previous three months.
Further, around 62,000 borrowers went on to choose another alternative mortgage up to six months before their deal ended, down from 104,000 between May and July.
In total, around 205,000 mortgages were on temporarily reduced monthly payments through the charter’s rules as of the end of October.
From when the Mortgage Charter was launched in July 2023 up until October this year, some 298,000 borrowers temporarily switched to interest-only payments or extended their mortgage term to reduce payments, accounting for 3.4% of regulated accounts. Only 1,453 term extensions have been reversed, suggesting that the majority of people seeking lower monthly payments chose the interest-only option.
In the three months to October, around 21,000 monthly mortgage payments were reduced due to people temporarily switching to interest-only or extending their term, similar to the three months to July.
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Some 291 properties were repossessed within 12 months of missing the first mortgage payment. Lenders reported that these were for customer-driven reasons, such as voluntary possessions or abandoned and vacant properties.
