The Chancellor met with six of the largest banks and building societies and UK Finance to address the impact of the US-Iran conflict on households, urging them to proactively contact customers.
Recent research from L&C Mortgages suggested that around a million fixed rate mortgages due to mature this year would be borrowers coming off ultra-low five-year terms, secured when average rates were 1.58%.
Data from Moneyfacts showed that due to rising swap rates and market uncertainty, the average mortgage rate was now 5.5%.
The Chancellor also reaffirmed the Mortgage Charter, pointing to the protections and support offered through the initiative. This includes allowing borrowers to secure a new rate and switch deals up to six months before their current rate ends, with the same lender and without an affordability check.
The Mortgage Charter also gives borrowers the option to move to interest-only payments for six months without impacting their credit score.
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The latest data from the Financial Conduct Authority (FCA) showed that over 230,000 borrowers locked into a new rate up to six months before their existing deal ended in the two months to December, a fall from around 280,000 in the preceding two months.
Lenders told the Chancellor that more borrowers were getting in touch for guidance, but lending was still stable and arrears remained low.
Around 86% of mortgages are on fixed rates so most borrowers have not been affected by the recent short-term market moves.
Rachel Reeves, Chancellor of the Exchequer, 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.”
