The Mortgage Charter
The Mortgage Charter is a voluntary scheme set up by the Government for active lenders to help mortgage borrowers struggling with their payments. It sets out the standards that lenders will adopt when helping residential mortgage customers who are up to date with their payments and who don’t rent out their property to tenants.
As Heliodor Mortgages is closed to new business and is not an active lender, we’re not permitted to sign up to the Mortgage Charter. However, we’re still committed to helping our customers in any way we can, and the support we can provide is similar to the options offered by other lenders who have signed up to the Mortgage Charter.
How we can help
It’s important to contact us as soon as possible if you’re having any difficulties in paying your mortgage. Simply talking to us about your situation won’t affect your credit file.
Although we’re unable to offer all of the options set out in the Mortgage Charter, we can still provide some of the options if you meet all of the following criteria:
- You’re an owner occupier and live in your mortgaged property.
- You’re up to date with your current mortgage payments and not in arrears.
- You don’t already have an interest only mortgage with us.
If you meet the criteria, then to help you reduce your monthly payments you can choose one of the following options:
- Switching your mortgage to interest only for six months.
- Extending your mortgage term.
You can read more about both of these options below.
If you don’t meet the criteria for any reason – please see the section toward the bottom of this page about other ways we can help.
To help reduce your monthly payments, you can request to temporarily switch your mortgage to interest only for 6 months. This won’t impact your credit score and we won’t need to complete an affordability assessment before accepting your request.
If you switch your repayment (capital & interest) mortgage to an interest only basis for 6 months, your monthly payments will be lower. However, as you will not be paying off any of the outstanding capital during the temporary switch period, your mortgage balance will stay the same.
At the end of the 6 month period, your mortgage will move back to its previous repayment type. When this happens, your monthly payments will be recalculated based on the overall mortgage balance, interest rate and the remaining term of your mortgage at the time. You will not have to go through an affordability assessment when you switch back.
When you switch back to your previous repayment type, your monthly mortgage payment may be higher than it would otherwise have been, as there will be less time left on your mortgage term to pay off the remaining balance. You’ll need to make sure you have plans in place for the higher monthly payments. It also means that you may pay more in interest over the life of your mortgage, as your balance will be higher for longer.
If you’re up to date with your mortgage payments you can apply to extend your mortgage term. This won’t impact your credit score and we won’t need to complete an affordability assessment before accepting your request.
Extending your mortgage term would reduce your monthly payments. However, it does mean that you’ll pay more interest overall.
If your mortgage is on a full repayment (capital & interest) or part repayment and part interest only basis then, assuming the mortgage interest rate and overall balance remain the same, extending your mortgage term will reduce your monthly payment amount.
It’s important to be aware that:
- If you have a full repayment mortgage, the impact of this reduction in the monthly payment amount will depend on your overall balance and mortgage term remaining.
- If you have a part & part mortgage, the proportion of the repayment element of a part & part mortgage will also affect the impact of any payment reduction.
Please note – if you extend the term of your mortgage, the amount of interest you will pay will increase. This means that extending your mortgage term will cost you more in the long run.
You have the option at any time during the first 6 months after you extend your term to return to your original term with no affordability assessment.
If you do choose to go back to your original term, your monthly payments will be recalculated based on the overall mortgage balance, mortgage rate and the remaining term of your mortgage at that time.
As your remaining mortgage term will be shorter by the length of your temporary concession period, your monthly mortgage payment may be higher than it would otherwise have been as there will be less time left on your mortgage term to pay off the remaining balance.
Important information before taking up these options
If you’re able to make your current monthly mortgage payments without taking up either of these options, then you should continue to do so as you’ll pay less in interest over term of your mortgage.
If you do miss a payment, we’re committed to not repossessing your home within 12 months of a first missed payment as set out under the Mortgage Charter. Repossession is a last resort, and we’ll do everything we can to avoid this course of action.
If you do wish to switch to Interest Only for six months or extend your mortgage term, please be aware that:
- These changes will be applied without carrying out an affordability assessment.
- Your credit score will not be affected by either of these changes. However, you should remember that other factors can affect your credit score, such as how much credit you use, your payment history and the number of applications for credit elsewhere.
Other ways we can help
If you don’t meet the criteria for the options we can offer under the Mortgage Charter, for example, if you’re already behind with your payments or you already have an interest only mortgage, then we can still help you. There are alternative options that we can consider.
Don’t wait until you miss a payment to contact us – we can help you even if you are currently up to date with your payments. The earlier you speak to us, the more options we may have to assist and the sooner we’ll be able to help you.
We’re used to supporting customers who are going through financial difficulties. When we speak to you, we’ll ask you some questions to understand your situation and we will explore the different options available to find the most appropriate outcome for your specific circumstances. Simply talking to us about your situation won’t affect your credit file.
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