Hinckley & Rugby is one of 59 mortgage lenders to commit to helping longstanding borrowers on reversion rates move to a more beneficial mortgage product.
The industry agreement, in conjunction with the Financial Conduct Authority (FCA), is aimed at borrowers who have been unable to switch from a reversionary interest rate due to the stricter affordability criteria introduced after the financial crisis.
The cross-industry voluntary commitment was announced by UK Finance, the Building Societies Association (BSA) and the Intermediary Mortgage Lenders Association (IMLA).
The lenders, including Hinckley & Rugby, have committed to contact qualifying borrowers by the end of 2018 if they haven’t already done so. Customers will not be obliged to switch.
Qualifying existing borrowers of an active lender must be first charge owner-occupiers up to date with repayments, on a reversion rate, looking for a like-for-like mortgage, have a minimum remaining term of two years and an outstanding loan of at least £10,000.
Hinckley & Rugby operations director Dean Waddingham said:
“We have not historically had a major problem with this issue and have only a small number of customers on such rates. Our commitment to this industry agreement reinforces our policy of not letting borrowers get into this kind of problem.”
Paul Broadhead, head of housing and mortgage policy at the BSA, said: “By signing up to this voluntary agreement lenders will ensure that existing borrowers are not disadvantaged by the changes to mortgage regulation since the financial crisis.
“The agreement formalises the actions that many societies have been taking and provides clarity and confidence for all affected borrowers.”