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Mortgage experts have warned that plans to scrap the ‘mortgage charter’ introduced in 2023 – including rules which protect homeowners from repossession – could disproportionately impact the over-50s.
The agreement aimed to stave off a wave of repossessions during a surge in interest rates two years ago. It can also help anyone who’s coming to the end of a fixed-rate mortgage term. So what could plans to scrap it mean for you?
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The charter was introduced by the Financial Conduct Authority and the Conservative government after the Bank of England base rate hit 5.25% in August 2023 after a long period of low interest rates.
The rapid rise in interest rates left thousands of households on variable rate mortgages struggling with much higher monthly payments, while those switching to fixed rate deals found new deals were more expensive than they were previously.
The charter
The agreement was signed by 49 lenders in the UK, which in total make up 90% of the residential mortgage market. That includes big players such as NatWest, Lloyds, Santander, HSBC and Barclays.
Now the Financial Conduct Authority (FCA) is considering axing the charter under Treasury pressure to reduce regulation.
In November 2024, chancellor Rachel Reeves said that post-crisis consumer protections had gone too far and called on financial regulators to ease restrictions on firms to help City firms grow and compete more efficiently.
Now FCA boss Nikhil Rathi says that with cooling interest rates and the existing Consumer Duty, the charter may now be redundant. Speaking at a conference in London in late June, he said: “I have raised with the prime minister and the chancellor the mortgage charter.
“It was designed for a period of sharply rising interest rates. But could it now be retired, with the [consumer] duty in place, repossessions lower, the maturing risk mindset? Do we need this duplicative approach, with the added reporting burdens it brings?
“So as we at the FCA review the mortgage market fundamentally, what signal does it send about political risk tolerance if the charter is retained?”
Richard Dana, chief executive of specialist mortgage broker Tembo Money, which partners with Saga to provide a mortgage advice service, said: “The mortgage charter was introduced at a time of intense volatility to offer reassurance and consistency for struggling homeowners.
“If the government does repeal it, it’s vital that the FCA continues to set clear expectations for lenders to treat customers fairly when they face financial difficulty.
“But we also need to look forward. Getting more first-time buyers onto the ladder means fostering a dynamic, responsive mortgage market that supports long-term stability and wider access to homeownership.”
According to the FCA, more than 1.7 million borrowers have benefited from the charter, with 257,000 using reduced monthly payments, either by temporarily paying interest-only or by extending their mortgage term.
In the latest data, from February to April 2025, around 341,000 mortgages locked into a new deal up to six months ahead of maturity, and 52,000 of those then moved into an alternative deal.
According to credit intelligence company, Pepper Advantage, homeowners aged over 60 and those aged between 51 and 60 are the two age groups most likely to fall into mortgage arrears.
Figures released last year by the Financial Conduct Authority under a Freedom of Information request showed that people over 50 make up half of homeowners who are two or more months behind on their mortgage payments. People aged 61 to 65 were most likely to be affected.
In total, 2.4 percent of this age group were at least two months in arrears. According to different research from Sun Life, as many as 500,000 retired people are still paying their mortgages off.
If you are living off a pension or savings, there will be little buffer for rising mortgage payments.
Many in this age group are also struggling with high energy bills and surging food inflation. Rohit Kohli, director at The Mortgage Stop, said: “We’ve moved from one crisis to another, and scrapping protections now ignores the reality facing many, especially those over-50 dealing with higher living costs and health or caring responsibilities.
“Red tape can be cut, as Rachel Reeves set out – but not at the cost of the most vulnerable.” Figures from UK Finance show that 1,220 homeowner mortgaged properties were repossessed in the first quarter of 2025, 18% more than in the previous quarter.
Government figures for the same quarter show that there were 6,765 claims for possession (the start of the process a lender has to go through to repossess someone’s home), up 31% from the same quarter in 2024.
The government figures also show that repossessions have been rising steadily since 2021. Claims for repossession peaked in 2009, following the 2008 financial crash, and only stabilised in 2015.
UK Finance says that there were 90,140 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the first quarter of 2025.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says it’s important to seek help quickly and work with your lender if you’re struggling: “For a lender to take repossession of a property really is the last resort.
Lenders would much prefer an open dialogue way in advance of this needing to happen. “There may be options open to the borrower, whether it is just a blip or a longer-term issue.
However, it is important to start that conversation sooner rather than later; often there is a temptation to bury your head in the sand but that will only make matters worse.”
Provided by Tembo
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