The reductions came “as people switched to temporarily paying interest-only or extended their mortgage term. This is around 1.4% of regulated mortgage contracts”, says the Financial Conduct Authority, which has published data on the start of the  programme.  

The scheme was launched by Chancellor Jeremy Hunt last June to help homeowners struggling to secure new remortgage deals amid the height of a series of interest rate rises, following the mini-Budget in the autumn of 2022.  

The FCA adds: “The data shows that only 103 term extensions were reversed, which could indicate that borrowers seeking a temporary reduction in their payments are more likely to opt for an interest-only period.”  

The charter was signed by 48 of the UK’s biggest lenders, representing around 90% of the mortgage market. The watchdog’s data spans last July and January.     

Its commitments include:  

• Not to force a borrower to leave their home without their consent, unless in exceptional circumstances, in less than a year from their first missed payment    
• To allow customers to lock in a new deal up to six months ahead of the end of their current fix, and to request a better like-for-like deal up until the new one starts, if one is available    
• To permit customers who are up to date with their payments to switch to interest-only payments for six months, without assessing affordability, or, to extend their mortgage term with the option to revert to their original term within six months  

The FCA says around 760,000 accounts “benefited from one or more of the options set out in the charter, whether explicitly or through a business-as-usual channel”.  

It adds that 67 properties were repossessed within a year of missing the first payment in the period covered by its research.  

The watchdog points out: “Firms report these were for customer-driven reasons, for example, voluntary possessions or abandoned/vacant properties.”