Lenders have said they are doing their “best to help” customers affected by the mortgage squeeze.
Chancellor Jeremy Hunt is due to meet with lenders on Friday, to ask what help they can give to those struggling and what flexibilities might be possible for families in arrears.
A spokesperson for trade association UK Finance said: “Lenders stand ready to help anyone struggling with their mortgage payments.
“If you are worried about your finances, do get in touch with your lender early to discuss the options available.
“They have teams of experienced and understanding advisers who will develop a solution tailored to your individual circumstances. Making a call to your lender to discuss the options available will not impact your credit score.”
If you are worried about your finances, do get in touch with your lender early to discuss the options available— UK Finance spokesperson
Recent research by HSBC UK, carried out by YouGov, indicated that only 3% of people are aware that they can contact their bank or building society to discuss their financial worries without it impacting their credit score.
HSBC said that among the actions it has taken, it has proactively contacted customers on its standard variable rate (SVR) and encouraged them to explore the options that are available to them. People often end up on an SVR when their initial deal ends.
It is also writing to customers whom it believes may be stretched, or would be stretched at roll-off, urging them to contact the bank where they need support.
Where customers are already in arrears, HSBC said its forbearance support includes regular customer checkpoints to ensure measures in place remain appropriate.
It also has a cost-of-living hub with information and links, including enabling customers to check which benefits they may be entitled to and not claiming. The bank said over £1 million has been highlighted to customers so far.
We're doing our best to help wherever we can— HSBC UK spokesperson
HSBC UK said it is continuing to look at ways it can support customers.
An HSBC UK spokesperson said: “We know that finances are being squeezed by higher household bills, everyday costs and many people will be feeling the pinch, so we’re doing our best to help wherever we can.
“Support ranges from increasing the number of people on our financial support teams and proactively contacting customers about how we can help, to giving customers appropriate time and breathing space to return to financial health, agreeing affordable solutions, or restructuring credit commitments, tailored to suit their circumstances.
“We are also providing free financial health checks and webinars for customers and non-customers alike with an HSBC UK financial wellbeing consultant.”
The bank said it works closely with other organisations who can help with financial guidance or additional support with tackling debt.
Nationwide Building Society has launched a “health checklist” which allows its members to see the options that may be available.
The mutual said it offers a wide range of forbearance options based on their individual circumstances and affordability.
These include extending the term of the loan, temporarily changing the repayment method, temporarily agreeing a reduced monthly repayment, and temporarily agreeing to a “nil payment” concession.
Members who are up-to-date with their payments and not in financial difficulty can also manage their mortgage through the society’s mortgage manager portal where they may be able to, for example, extend the term of their loan.
Meanwhile, a NatWest spokesperson said: “We understand that some mortgage customers might be concerned and we offer an extensive range of support measures.
“We encourage anyone who is experiencing financial difficulty or is just worried about the future to get in touch and talk to us. We have highly trained colleagues who are there to listen, understand and work with them to find a way forward.”
NatWest offers mortgage customers in arrears a range of support tailored to their circumstances, including extending the mortgage term, repayment plans up to 24 months, breathing space, and allowing customers to pay a reduced or zero mortgage payment for a period of time.
The bank has been undertaking proactive communications with customers through the cost-of-living squeeze and pointing to sources of support.
And a Santander spokesperson said: “We are committed to helping our customers through more challenging times and provide a range of options to support those facing financial difficulties tailored to their individual circumstances.
“Our specialist teams will assess the best personalised approach for mortgage support with options including extending the mortgage term, moving all or part of the mortgage to interest-only, reviewing the mortgage rate and considering payment holidays.
“We would urge anyone who is feeling under pressure with their mortgage payments to talk to us as soon as possible so we can discuss the best solutions.”
Ele Clark, Which? Money senior editor, said: “The first thing these borrowers should do is talk to their lender about what support is available, which may include a temporary break from payments, interest-only payments or extending the term of your mortgage.
“The best option for you will depend on your personal circumstances, but rest assured that discussing options with your lender will not affect your credit rating.
“The Financial Conduct Authority previously wrote to banks to remind them of their obligations to serve customers, especially those experiencing financial difficulties, and the regulator must continue to monitor this to ensure firms are offering support that is tailored to individual customers’ needs.”
A Number 10 spokesman told reporters: “We’ve said that mortgage deals that are offered by banks are obviously a commercial decision for them, in which we don’t seek to interfere, but we still believe that lenders should live up to their responsibilities and support mortgage borrowers who are finding it tough.”
