A total of 90,453 mortgage accounts are paying reduced monthly bills, either through the Government's Mortgage Charter or via lenders' existing support options, data from the regulator reveals.
Data from the Financial Conduct Authority (FCA) showed that, since the Mortgage Charter came into effect in July last year and until January 2024, 123,000 mortgage accounts had switched to interest-only payments or extended their terms.
This accounted for 1.4% of regulated mortgages.
In August last year, 19,191 accounts switched to temporary interest-only payments. This more than doubled in just a month from 9,659 accounts in July – the first month of the Mortgage Charter rules.
However, in September, this fell back to 17,622.
By January 2024, 9,988 mortgage accounts had moved onto a temporary interest-only payment structure, paying the interest charges but not the capital of the amount borrowed.
Some borrowers chose to exit the interest-only payment arrangement earlier than agreed, with 24 doing so in July and 87 in August. January saw the highest number of people exiting the arrangement at 462, up from 305 in December.
Mortgage term extensions
In July, 2,058 mortgage accounts newly obtained a term extension, rising to 5,822 in August. The number of people agreeing to a new mortgage term extension hovered around 4,400 and 5,300 in between September and January.
By January, there were 5,193 accounts that had newly obtained a term extension.
Some borrowers reversed this decision within six months, with the majority doing so in January (61 accounts).
Fewer than 10 accounts reversed the term extension within six months between July and November, with no reversions in the first two reported months. In December, there were 20 reversed term extensions within six months of the change.
In total, 67 properties were taken into possession within 12 months of the first missed payment.
Borrowers shopping around
The FCA data showed that borrowers were considering their options early, with more than 100,000 people securing a new mortgage deal up to six months before their current one ended.
This reached a peak of 146,747 accounts in November.
As for people who secured a new mortgage deal up to six months before maturity, then chose another product before that deal started, this rose sharply from 3,326 accounts in July 2023 to 54,203 accounts in January 2024.
The FCA said it would continue to monitor the mortgage market and observe data to understand how it’s been used to potentially shape policy.
Related: Increase in mortgage holders missing essential payments
