Mortgage Charter Protections

The Mortgage Charter was agreed between HM Treasury, the Financial Conduct Authority, and most major UK mortgage lenders in June 2023 in response to rising interest rates. It commits participating lenders to offer specific forbearance measures to borrowers facing payment difficulties.

The Charter is voluntary — it is not a statutory right. But it is enforced by the FCA through the existing Mortgage Conduct of Business (MCOB) rules, which require lenders to treat customers in financial difficulty fairly. Failure to follow the Charter is a relevant factor in any complaint to the Financial Ombudsman Service.

The list of participating lenders is published on GOV.UK and covers most high-street banks, the largest building societies, and many specialist lenders. Buy-to-let mortgages are not covered.

The Charter offers four main forbearance options:

1. Switch to interest-only for up to 6 months — no new affordability assessment, no credit-file impact, provided you are up-to-date when you ask. You can switch back within 6 months without underwriting.
2. Extend your mortgage term to reduce monthly payments — then switch back to your original term within 6 months without re-assessment.
3. Reasonable conversation about options with your lender that does not get recorded as a missed payment or arrears event.
4. 12-month repossession moratorium from your first missed payment, except in exceptional circumstances. This is in addition to the Pre-Action Protocol for Possession Claims based on Mortgage Arrears.

The Charter also commits lenders to provide tailored support — payment holidays, capitalising arrears, term extensions tailored to your circumstances — beyond these four headline measures.

The first step is to contact your lender directly. Most have a dedicated Mortgage Charter or financial-difficulty contact route on their website.

When you contact them:

• Ask specifically about Mortgage Charter protections;
• Make notes of what is agreed and get confirmation in writing (email is fine);
• Check your statements afterwards to confirm the changes have been applied correctly.

You will need to be a residential owner-occupier (not buy-to-let) and explain that you are facing or expect to face payment difficulties — a brief account is usually enough; you do not need to prove specific facts. Switching to interest-only or extending your term reduces the monthly payment but increases the total cost of the mortgage. Treat it as breathing space, not a long-term solution.

If your lender is not signed up, you still have substantial rights under MCOB 13 in the FCA Handbook (arrears, payment shortfalls, and repossessions). Your lender must:

• Treat you fairly and consider all options before repossession;
• Allow you reasonable time to repay;
• Consider a payment holiday, term extension, or other forbearance;
• Follow the Pre-Action Protocol before applying for a possession order.

If your lender is signed up but refuses to apply the Charter, or applies it incorrectly:

1. Make a formal complaint in writing. The lender must give a final response within 8 weeks.
2. Refer to the Financial Ombudsman Service within 6 months. The FOS is free, independent, and can award compensation. Failure to follow the Charter is relevant.
3. Get free debt advice from National Debtline, StepChange, or Citizens Advice. They can review your wider position.

If you are at risk of repossession, contact Shelter's emergency line urgently. Do not stop paying altogether without speaking to your lender first — that accelerates the process and limits the Charter options available.

The Mortgage Charter is one layer of protection, but it works alongside other legal schemes. Understanding how they interact helps you plan your next steps if the Charter alone is not enough.

Breathing Space Debt Respite Scheme

The Debt Respite Scheme (Breathing Space), administered by the Insolvency Service since May 2021, gives eligible individuals a 60-day period during which creditors — including mortgage lenders — cannot take enforcement action. During Breathing Space:

• The lender cannot charge interest, fees, or penalties;
• They cannot initiate or continue possession proceedings;
• The Charter's 12-month repossession moratorium and Breathing Space can overlap if the circumstances coincide.

To access Breathing Space, you must apply through a debt adviser (Citizens Advice, StepChange, or National Debtline). It is not available if you are already insolvent or in a debt relief order.

The possession timeline: what to expect

Even if a lender proceeds to possession, the process takes time and you have opportunities to defend at each stage:

1. Lender contact and forbearance period — the Charter's 12-month moratorium starts here.
2. Pre-Action Protocol compliance — the lender must send a formal letter, give you a reasonable opportunity to repay, and consider alternatives. Court proceedings begun without following the Protocol risk being stayed by the judge.
3. County court possession claim — you will receive a claim form (N5) and hearing date. You can defend or apply to suspend the possession order.
4. Possession order — if the court grants possession, you may apply under section 36 of the Administration of Justice Act 1970 to suspend it if you can demonstrate a reasonable prospect of paying off arrears within the remaining mortgage term.
5. Warrant and bailiff — enforcement cannot happen without a warrant, which requires a separate application. You can apply to suspend the warrant up to the point of eviction.

At each stage, seek free specialist mortgage debt advice. The earlier you engage, the more options remain available.