Skipton Building Society is launching a low-rate mortgage range specifically designed to help existing borrowers at risk of payment difficulties.
Through the Mortgage Charter, Skipton already has a package of support for any borrowers struggling with their monthly mortgage payments – from offering temporary adjustments to their repayment schedule or by extending their mortgage term. Under the charter, these are temporary shorter-term adjustments, but what’s needed for some customers – those who need greater financial certainty – is access to an alternative mortgage option to support them over the medium-term.
To tackle this, Skipton has developed a range of mortgage options to provide an alternative layer of support to its borrowers. Following testing and development, Skipton has created a new, two-year, low interest rate, member only range.
These mortgage products will give any existing owner-occupied Skipton borrowers approaching the end of their current deal and who will be financially stretched on current rates, the opportunity to bridge their payments by maintaining a lower interest rate for two years. Despite offering fee-free options on all its ranges, over half of Skipton’s borrowers chose mortgages with a fee to help keep their monthly payments as low as they can. With this in mind, this bespoke range has a fee of 5% of the existing loan amount which can be added to the mortgage balance.
Skipton says that, with the UK having seen strong house price index growth over the past two years, many borrowers may now fall into a lower loan-to-value bracket than they expected. The new range enables those borrowers in need of greater financial support to harness that additional equity to support them over the two-year period, by offsetting a lower interest rate (and monthly payments) with a higher upfront fee. This will help take some of the pressure off those borrowers’ monthly budgets and give them some much-needed longer-term security beyond what the Mortgage Charter currently offers.
These two-year low-rate products are intended for members who need this level of added support to help them during these difficult times. Skipton will work directly with its borrowers who are facing financial difficulties to understand their individual financial situations and to work directly with them to offer options that helps them in the short and medium term.
Charlotte Harrison (pictured), Skipton’s CEO of home finance, said: “Its crucial lenders offer as much support as we can to ensure borrowers remain secure in their own homes through these turbulent times, by looking at further opportunities to provide certainty and confidence in the ability to maintain payments.
“Signing the mortgage charter was just one step in us providing support, but we feel we can do more for our borrowers. It’s important we think differently, on what further support could be to make a real difference for our members who may be facing a future of financial difficulty due to the limited options on the market available to them.
“Our borrowers have benefitted from strong growth in house prices over the last couple of years, earning them additional equity in their properties. For those who are financially stretched, this is a good time to consider if they can make that equity work for them.
“We will always work directly with our borrowers to understand their personal situations and work with them on a solution that is most suited to them and their circumstances. This range of mortgages presents another option for our members – it’s not to say, that they will be right for everyone.
“We really encourage all homeowners to be aware of what help is available from their lenders. If they’re worried they’re going to get into financial difficultly please do reach out to your lender. The sooner a person gets into contact with their lender the more options they have available to them to help tackle the problem early.”