Additional help for our mortgage customers
A message from Andrew Haigh, Chief Executive
We understand that current events are a growing cause for concern and in some cases, financial difficulty.
Measures by the Bank of England to bring inflation down have seen an increase in the base rate of interest on 13 continuous occasions from the low rates at the end of 2021, to 5% today.
This comes at a time when the UK has been feeling the effects of a non-stop higher cost of living and adds extra pressures to hard-pressed household finances, especially for those with mortgages.
Many borrowers who took out fixed rate mortgages at lower rates will be coming to the end of that term and need to consider their options. For mortgage borrowers moving from a low fixed rate, or borrowers linked to the base rate (in base rate tracker products, for example), and those on a standard variable rate, the increase in interest rates will be unsettling and for some, create a serious financial challenge.
Any borrower who can meet their new payments should continue to do so. This will always be the best course of action, and will always mean you pay less interest overall.
Mortgage lenders, the FCA, UK Finance, the Government and others including the Building Societies’ Association have come together to provide borrowers with A Mortgage Charter to provide reassurance and support through these difficult times
Newcastle Building Society have signed the Charter, which will introduce extra measures for those experiencing mortgage payment difficulties in what are very challenging times.
We are well prepared to help our customers with a wide range of mortgage support options already in place, and we always encourage our customers to speak with our highly trained team as soon as they can to understand the best solution for their personal situations.
What help is available?
Anyone worried about their mortgage payments should speak to us as soon as possible.
Speaking to your lender won’t affect your credit file and we will try to support you wherever we can, always taking into account your personal situation.
We already offer the following support:
- Timely information to help you plan ahead if your current rate is due to end
- Support for you to switch to a new deal at the end of your existing fixed rate without another affordability check, provided you are up to date with payments and not seeking to borrow more, or change your repayment type or term
- Support tailored to your needs, such as changes to payment plans, short-term payment delays, or part interest, part repayment options. If you are struggling, or feel that you will struggle, our friendly and well trained team are available to support you and will take into account your personal situation.
We are adding the following measures as part of our Charter commitment:
- The chance to switch to interest only for a maximum period of six months, or, to lengthen your mortgage term to reduce your monthly payments, with the ability to switch back to your original term within six months by contacting us. Either option can be taken up without needing a new affordability check* and without affecting your credit file.
(*Affordability will need to be checked if you wish to permanently change to an interest-only mortgage, or where the mortgage term will extend beyond your expected retirement date)
- If you are coming to the end of a fixed rate deal you will be able to lock in a new deal up to six months beforehand; and also apply for a better deal until the start of your new mortgage product if a better deal is available. If you are up to date with your payments these options are available without a new affordability check, and without affecting your credit file.
- We will not repossess homes within 12 months from the date of a first missed payment
Note: the commitments above do not apply to buy to let mortgage customers
It’s also important to understand that monthly payments after the support may be higher than they might have been without the support, and that overall you will pay back more.
Please talk to us if you are in any way worried about your situation, be that right now, or maybe in the future.
If you are currently in arrears you should continue to work with us on the support that you need.
Some other useful services are also available to you:
We also provide additional support through our Helping Hand partnership with Citizens Advice Gateshead. The service is available to our customers nationally and goes beyond mortgage payment difficulties, looking at a wide range of support, including access to food shopping vouchers if you are experiencing a financial emergency.
Helping Hand provides quick phone and email access to advisers who will take the time to understand your personal situation, check the available options, and provide you with tailored advice and guidance to help you make informed decisions.
Our customers have already found this a valuable support to them practically and financially, which has given them a greater understanding and sense of control. Further information is here.
Payplan: our arrangement with Payplan, a debt advice management service, means you can choose to be referred directly through to them as part of your conversation with our mortgage customer adviser. Payplan provides free, confidential and clear advice and support and will work with creditors on your behalf.
We will shortly be adding more information to our website about how to manage payment difficulties and our customer service advisers are on hand to provide support and information.
We are your building society, and we’re here to help.
With best wishes
Andrew Haigh, Chief Executive