Will the Mortgage Charter Be Scrapped? What is It?

What is the Mortgage Charter?

The Mortgage Charter was forged in the aftermath of aggressive interest rate hikes. Initiated by the FCA in collaboration with the Conservative government, it sought to prevent widespread home repossessions as rates soared and affordability shrank.

The charter offered crucial relief mechanisms:

• A 12-month grace period post-first missed payment before repossession proceedings could begin.
• Permission for borrowers to switch to interest-only payments or extend mortgage terms, without undergoing fresh affordability tests.
• The ability to seek arrears advice without damaging credit reports.
• Rate-locking options, allowing borrowers to secure new deals up to six months ahead of the end of their current fixed term.

Signed by 49 of the UK's largest lenders, covering 90% of the residential market, the charter created a united front during a period of extreme financial stress.

Why the Mortgage Charter Was Introduced

When the Bank of England base rate shot up to 5.25% in August 2023, it marked the end of a long era of low-cost borrowing. Thousands on variable-rate mortgages saw payments skyrocket overnight, while those reaching the end of fixed-rate deals faced prohibitively expensive new terms.

The Mortgage Charter served as a buffer—a financial lifeline—preventing borrowers from being swept away by rising costs. It introduced consistency, compassion, and clarity in a market prone to knee-jerk lender reactions during crises.

Is the Mortgage Charter Being Scrapped?

Now, with the economic climate ostensibly stabilising, the charter’s future hangs in the balance. The Chancellor, Rachel Reeves, has voiced frustration over what she perceives as overzealous consumer protections that may hinder market competitiveness. In response, the FCA is actively reviewing whether the charter should be dismantled.

Speaking at a London conference, FCA Chief Nikhil Rathi questioned the charter’s relevance in the current climate:

“It was designed for a period of sharply rising interest rates. But could it now be retired... Do we need this duplicative approach?”

Critics argue that removing the charter would not just trim bureaucracy—it would dismantle a vital safety net for consumers at a difficult time.

Who Will Be Most Affected?

While all borrowers could feel the pinch, the over-50s are in acute danger. Data from the FCA shows that people over 50 make up half of homeowners who are two or more months behind on mortgage payments. Among those aged 61–65, a staggering 2.4% are in arrears.

For retirees and near-retirees reliant on pensions or dwindling savings, the margins are perilously thin. Rising energy costs, food inflation, and healthcare burdens compound the financial stress.

Mortgage expert Rohit Kohli put it bluntly:

“Scrapping protections now ignores the reality facing many, especially those over-50 dealing with higher living costs and health or caring responsibilities.”

The Rising Tide of Repossessions

Repossession data paints a bleak picture. In the first quarter of 2025 alone:

• 1,220 homes were repossessed—a rise of 18% from the previous quarter.
• 6,765 possession claims were filed—a 31% year-on-year increase.

UK Finance also reports that over 90,000 mortgages are in serious arrears, representing 2.5% or more of the outstanding balance. These numbers indicate not just isolated hardship, but a swelling systemic issue.

The trend eerily echoes the post-2008 financial crash period when repossessions spiked, peaking in 2009 and only stabilising years later.

Implications of Repealing the Charter

Removing the Mortgage Charter wouldn’t just erase a few lines of regulatory code. It would strip vulnerable borrowers of vital leeway—the ability to adjust terms, delay repossession, and access help without facing credit ruin.

Moreover, it sends a signal to lenders that leniency is no longer expected. Without clear protections, financial institutions may revert to aggressive collection tactics, further destabilising already fragile households.

What To Do If You’re Struggling With Mortgage Payments

Mortgage stress doesn’t have to end in repossession. Immediate action can change the outcome—no matter how dire it seems.

Mark Harris, CEO of SPF Private Clients, urges borrowers to communicate early with lenders:

“There may be options open to the borrower… but it is important to start that conversation sooner rather than later.”

Even if your eviction is just an hour away, it's not too late to act. Contact HMS. We specialise in stopping repossessions, negotiating with lenders, and helping people stay in their homes—even at the eleventh hour.

Act now. Don’t wait until the bailiffs are at the door.

Call HMS 24 hours a day, 7 days a week to explore your options and protect your home.