Chancellor Rachel Reeves has met with the UK’s six largest banks and building societies to assess the impact of the Iran conflict on households and small businesses, with lenders agreeing to proactively contact around 1.6 million customers whose fixed-rate mortgage deals are due to end this year.
Mortgage Charter reaffirmed as rates climb
The meeting, attended by UK Finance and the Economic Secretary, resulted in lenders committing to outline available options and support to borrowers ahead of any changes to their repayments. The Chancellor also reaffirmed the Mortgage Charter, which allows borrowers to secure a new rate up to six months in advance or switch deals with their existing lender without a new affordability check.
Temporary measures available under the Charter include switching to interest-only payments for up to six months, with lenders confirming that support discussions will not affect credit scores.
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.”
The meeting comes as mortgage rates continue to climb despite a pause in the Iran conflict, with swap rates – which underpin fixed-rate mortgage pricing – remaining elevated due to ongoing geopolitical uncertainty.
Most borrowers protected for now
With around 86 per cent of UK mortgages currently on fixed rates, most borrowers are not immediately exposed to short-term market fluctuations. However, landlords who locked in rates during the low-rate era of 2021-22 face significant payment increases when they come to refinance.
This follows Residential Landlord’s analysis of the mortgage repricing crisis, which found that more than 25,000 products were withdrawn in a matter of weeks – exceeding even the turmoil seen during the 2022 mini-Budget.
Lenders reported an increase in customer enquiries following the conflict, although data indicates lending volumes remain stable and arrears are low by historical standards.
Opinion
The meeting represents welcome reassurance for landlords facing remortgage deadlines in volatile conditions. The Charter’s provisions – particularly the ability to lock in a rate six months ahead – offer genuine breathing room. However, the underlying problem remains: rates are far higher than many landlords budgeted for, and no amount of Charter flexibility changes that fundamental arithmetic.
