Mortgage Charter 2026 — 311,000 mortgages enrolled, what's next

Written and reviewed by the South Yorkshire Property Buyers team (a trading name of Bullseye Properties Ltd, company 14869608, previously Lord CNB Properties Ltd until 18 April 2024). Published 29 May 2026 · Last reviewed: 2 June 2026.

What the Mortgage Charter is, in plain English

The Mortgage Charter is not a law. It is a voluntary agreement put together by the Chancellor of the Exchequer, the Financial Conduct Authority and the heads of the major UK mortgage lenders, agreed on 23 June 2023 against a backdrop of rapidly rising interest rates and Bank of England base rate hikes. It was designed to give homeowners breathing room without forcing the regulator to make sudden rule changes.

Three things make the Charter unusual. First, it was negotiated in days rather than months, in response to a real-time payment shock as fixed-rate deals expired into much higher rates. Second, sign-up coverage is exceptionally high — 49 lenders representing roughly 90% of the regulated residential mortgage market, according to HM Treasury data published in December 2025. Third, although it is voluntary, the Consumer Duty (effective 31 July 2023 for open-book products and 31 July 2024 for closed-book) sits over the top of it, which has made many of the Charter's principles enforceable in spirit even where a lender is not formally signed up.

The headline number — 311,000 mortgages enrolled by December 2025 — is significant. That is not 311,000 separate borrowers contacting their lender; it is 311,000 mortgages actually placed onto Charter forbearance options. The real number of borrowers who have benefited from Charter-influenced conversations is many times higher.

Test the Charter's headline benefit on your own mortgage

The biggest Charter right is the ability to switch to interest-only for six months with no affordability check and no credit-file marker. Below you can run your own numbers against both modes. Set the calculator to "Repayment" first to see your current monthly figure, then switch to "Interest-only" to see how much breathing room six months would buy you.

Mortgage payment calculator

Enter your loan, rate and term. Numbers update as you type. No data leaves your browser.

Outstanding loan balance

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Interest rate

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Years remaining on mortgage

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Mortgage type

Repayment (capital & interest) Interest-only

Monthly payment —

Total paid over term —

Total interest —

If your rate rises at renewal

Honestly — does that monthly figure work for your household?

Yes — it's tight but manageable I can pay it now, but a rate rise would break me No — I'm already missing payments or about to

Good — your buffer is real, but plan for renewal.

If the figure works today, your priority is preparing for the rate at your next renewal. The Mortgage Charter lets you lock in a new rate up to six months before your current deal ends without penalty. If you ever do hit trouble, the forbearance options on this site still apply — they exist for short, unexpected shocks (illness, redundancy, divorce) even when the underlying mortgage is normally affordable.

You're in the zone the Mortgage Charter was built for.

The Charter lets you switch to interest-only for six months or extend your term to reduce monthly payments — both with no affordability check and no credit-file marker. For a loan like the one above, switching to interest-only typically cuts your payment by 30–40%. That alone can absorb a 2% rate shock. If after running those options the maths still doesn't work, selling on your own terms while you still have equity and time almost always beats waiting for a forced sale.

See what we'd offer for the house

You're not alone, and the order of what to do next matters.

Start with two free calls: StepChange (0800 138 1111) and your lender's hardship team. Both are free, neither will judge you, and asking the lender for help is not a credit-file event under the Mortgage Charter. Lenders have legal duties to try forbearance, term extension and interest-only switches before any repossession step.

If you've had those conversations and the position is genuinely unrecoverable, selling on your own terms — while you still have time, equity and a clean title — is almost always a better outcome than waiting for the court timeline. We don't charge fees, we don't pressure, and we can give you a written offer within 24–48 hours so you know what's on the table.

Get a no-obligation cash offer

For illustration only — not financial advice. Your actual payment depends on your lender's product terms, any product fees, and any arrears already on the account. Get personalised free advice from StepChange or MoneyHelper.

The five Charter measures, in detail

The Charter sets out a package of measures. Not all apply to every borrower, and not every lender implements them identically — the FCA holds firms to the outcomes, not the precise mechanism. The headline measures are:

1. Six-month switch to interest-only payments without a fresh affordability test

Any borrower can ask to move temporarily to interest-only for up to six months. The lender is not allowed to require a new affordability assessment for this. After six months, payments revert to capital-and-interest unless the borrower has agreed something different. The arrears of capital you would otherwise have paid down get added to the loan, so the term-end balance grows; you do not "save" the money, you defer it.

2. Term extension (with a reversibility window)

Borrowers can extend their mortgage term to reduce monthly payments. Critically, the Charter gave borrowers a six-month window in which to reverse this decision without penalty, so a household trying a longer term as a stress-test could go back to the original term if things turned out to be manageable. This was a structural improvement on previous lender practice, where term extension was treated as a one-way change.

3. Twelve-month repossession protection from first missed payment

Signatory lenders committed not to force a borrower to leave their home within twelve months of their first missed payment, except in exceptional circumstances (such as the borrower abandoning the property, or actively refusing to engage). This sits alongside, and is stronger than, the long-standing Pre-Action Protocol for Mortgage Possession Claims, which already required possession to be treated as a last resort.

4. Six-month early rate lock

You can lock in a new fixed rate up to six months before your existing deal ends and switch to a better deal if rates have fallen by the time your current product expires. In a falling-rate environment this is genuinely useful — it caps your upside-down risk while preserving access to better deals.

5. No automatic credit-file damage for using Charter options

Major lenders confirmed that using the headline Charter options — a six-month interest-only switch, or a temporary term extension — will not, in itself, be reported as missed or late payments on a borrower's credit file. The change is, however, visible to the existing lender, and may be considered the next time you apply for credit with them. A full missed payment, by contrast, is reported.

Who has signed up — the 49 signatories

The signatory count is the headline scale figure. As of HM Treasury's December 2025 update, 49 mortgage lenders have signed the Charter. Between them they account for around 90% of the regulated UK residential mortgage market by stock. That includes every major high-street lender, almost all of the building societies, and most of the specialist lenders that operate in the buy-to-let and adverse-credit segments.

That 90% figure matters because it changes the question a borrower needs to ask. The default assumption in 2026 should be that your lender is a Charter signatory and these protections apply, unless you are with one of the small number of specialist lenders outside the scheme. Even if you are, the Consumer Duty obliges your lender to deliver "good outcomes" — which the FCA has signalled it will read in light of what the Charter sets as a market baseline.

Why this matters in 2026, not 2023

The Charter was born in the panic of summer 2023. By 2026, three things have changed. First, the volume of borrowers needing it has shifted. UK Finance data continues to show mortgage arrears at elevated levels compared with pre-2023 norms, with a slow easing from the 2024 peak. Many of the borrowers now seeking forbearance are not those rolling off pre-2022 fixes for the first time — those people have largely passed through the pinch — but those whose circumstances have changed (job loss, illness, relationship breakdown) and who are encountering payment difficulty on already-elevated rates.

Second, the Consumer Duty closed-book extension (31 July 2024) brought legacy mortgages — including older interest-only loans and historic specialist products — into scope of the same outcome-based regulation. That has materially changed how lenders handle borrowers who are not on currently-marketed products.

Third, the FCA's expansion of MCOB 13 forbearance rules in Policy Statement PS24/2 (in force 4 November 2024) hardened many Charter principles into formal regulatory rules. Lenders are now required, not just encouraged, to consider a wider range of forbearance options before pursuing possession.

What the Mortgage Charter does not do

The Charter is widely misunderstood. Here is what it is not:

• It is not a debt write-off. Every Charter option defers cost, it does not eliminate it. Interest-only periods, term extensions and arrears all increase the total interest paid over the life of the loan.
• It is not a payment holiday. The six-month interest-only switch still requires you to pay the interest. The COVID-19 payment holidays — where lenders paused full payments — were a different and now-ended scheme.
• It is not a permanent repossession ban. The twelve-month protection runs from the first missed payment, not indefinitely, and is subject to exceptional-circumstances exclusions.
• It does not solve negative equity. If your home is worth less than the mortgage balance, no amount of forbearance fixes that — selling at a shortfall, or staying put long enough for the market to recover, are the only routes out.
• It does not apply to second-charge loans or unregulated buy-to-let in full. The Charter is principally about regulated first-charge owner-occupier mortgages, though many lenders have voluntarily extended similar approaches to other products.

How to engage your lender — a practical script

The single biggest mistake borrowers make is going quiet. Lender forbearance teams handle thousands of borrowers a week. They are not adversarial — their commercial interest is in keeping you in the property and paying. Repossession is expensive, slow and produces lower recoveries than a customer who stays.

A useful framing when you call:

1. Identify the change. Be specific about what has changed since you took the mortgage out — income drop, job loss, relationship change, health, increased outgoings. Lenders need a narrative they can place into a forbearance category.
2. Ask for options under the Mortgage Charter by name. The phrase "I'd like to understand the options available to me under the Mortgage Charter" cuts through to the right team in most lenders' phone trees.
3. Be honest about the timeline. If you think the problem is temporary (three months of reduced income, a partner returning to work, an inheritance landing) say so. If you think the underlying gap is permanent, do not pretend otherwise — you waste a Charter window on a problem it cannot solve.
4. Get the outcome in writing. Whatever is agreed, ask for written confirmation. Note the date of any reversal window (six months from change is the Charter standard).
5. Schedule the next conversation. Agree, on the call, when you will speak again — typically before any temporary measure expires. Diarise it.

How to escalate via the Financial Ombudsman Service

If your lender is not engaging properly, or if the outcome you've been offered does not feel fair, there is a structured escalation path.

First, raise a formal complaint in writing. Use the word "complaint" — that triggers the regulatory complaints process. Set out clearly what you asked for, what was offered or refused, and why you believe the outcome breaches either the Mortgage Charter, the FCA's MCOB rules, or the Consumer Duty.

Your lender has up to eight weeks to provide a final response. If they do not, or if you are unhappy with the response, you can escalate free of charge to the Financial Ombudsman Service. The Ombudsman can require the lender to put things right and, where appropriate, pay compensation.

The Consumer Duty has materially changed how the Ombudsman approaches these cases. Where previously the question was largely whether the lender followed its own procedures, the Ombudsman now looks at whether the outcome delivered was a "good outcome" under Consumer Duty principles. That has favoured borrowers in a number of recent published determinations.

The FCA Consumer Duty overlay — why it changes everything

The Consumer Duty came into force on 31 July 2023, with the closed-book extension on 31 July 2024. It is not a Mortgage Charter rule, but it is the regulatory lens through which Charter compliance is now read.

In short, the Duty requires regulated firms to deliver "good outcomes" for retail customers across four areas: products and services, price and value, consumer understanding, and consumer support. For mortgage lenders this means that even where the Charter is voluntary and does not formally bind a non-signatory lender, the FCA expects all firms in the market to operate in a way that delivers good outcomes consistent with the Charter's principles.

For borrowers, that has two practical consequences. First, you should expect Charter-equivalent treatment from any FCA-regulated lender, signatory or not. Second, if you don't get it, the Consumer Duty is the framework in which your complaint will be assessed.

Where the Charter fits if you genuinely cannot afford the mortgage

The Charter is a powerful tool for borrowers whose problem is a temporary cash-flow squeeze — a job change, a rate-roll shock, a few months of higher costs. It does not fix structural unaffordability.

If, having used the available forbearance options, the underlying gap between your income and your mortgage cost is not going to close, the kindest outcome is usually to sell voluntarily before formal arrears compound and before repossession proceedings start. A voluntary sale typically returns more money than a repossession auction, protects your credit file from a repossession marker, and lets you choose the timing and circumstances of your move.

The decision matrix usually looks like this:

Situation	Right tool
Temporary cash-flow squeeze, problem will pass in 3–6 months	Charter interest-only switch or term extension
Rate-roll shock, fixed deal ending in 6 months	Charter early rate lock
Already missed payments, repossession risk approaching	Charter twelve-month protection plus formal forbearance plan
Permanent affordability gap, forbearance only delays the problem	Voluntary sale — open market or cash buyer

If your situation falls into the last row, our deep guide on what to do if you can't afford your mortgage walks through the options, and our companion guide on selling a house before repossession covers the timeline considerations if formal action has started. For background reading on how Bank of England policy got us here, see the Bank of England base rate history 2020–2026.

What's next — where the Charter goes from here

The Mortgage Charter was framed as a response to a particular interest-rate moment, but it has settled into a permanent piece of UK consumer-finance furniture. Three threads to watch in 2026 and beyond:

• Permanence and formalisation. The FCA's PS24/2 has already hardened several Charter principles into formal MCOB rules. Expect more of the same: voluntary commitments quietly migrating into binding regulation.
• Coverage expansion. The Treasury has hinted that buy-to-let landlords, currently outside the Charter's regulated owner-occupier scope, might be brought within similar protections — a major topic if implemented.
• Standardisation across lenders. Borrowers currently experience meaningfully different forbearance offers depending on which signatory they happen to be with. Pressure is building, especially from the Ombudsman, for greater consistency.

For now, the practical takeaway for any homeowner in South Yorkshire — or anywhere in England and Wales — is straightforward. If you are struggling, talk to your lender by name about the Charter. If the Charter is not enough, talk to a debt adviser or a cash buyer about what comes next. The worst outcome is the one that comes from staying silent.

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