Lenders must proactively contact around 1.6 million mortgage customers whose fixed rate deals are expiring in 2026, setting out their options and explaining any support that might be available.
The aim is to ensure borrowers are informed about their available choices ahead of potential changes to their monthly payments.
Many borrowers are facing a sharp jump in mortgage costs when their current deals finish, with some having locked into deals lower than 1.5% five years ago.
Average mortgage rates have jumped in recent weeks amid inflationary pressures linked to conflict in the Middle East. Some economists have warned that the Bank of England may need raise rates this year if the war continues much longer.
Chancellor of the Exchequer, Rachel Reeves said: “In uncertain times, people need clear reassurance and practical help.”
Mortgage Charter provides further protections
The move follows a meeting earlier this week between Reeves and representatives from the UK’s six largest banks and building societies, alongside UK Finance, with lenders agreeing to expand their support for customers.
The Government has also reinforced its backing of the Mortgage Charter, underlining the protections already in place for borrowers concerned about rising costs.
Under the Charter, homeowners can secure a new mortgage rate up to six months before their current deal ends. Alternatively, they can move onto a new arrangement with their existing lender without having to go through further affordability checks.
The Charter also enables borrowers who might be struggling to cover mortgage payments to switch to interest-only payments for a six-month period without this affecting their credit rating.
Banks say they have noted an increase in customers seeking advice, although arrears levels are still relatively low, suggesting those who have already remortgaged this year are managing to cover their repayments.
