The new measures also allow borrowers to change the terms of a mortgage for up to six months without the lender undertaking fresh credit checks, which could pose risks for banks in the longer run.
The new measures are a response to the Bank of England raising interest rates to 5.0% to fight high inflation.
The FTSE index of British bank stocks was down 1% after the details of the new measures emerged.
The changes to Britain's mortgage market mean that moves in interest rates have a less immediate impact on homeowners than they did in the past.
LONDON DAILY ARCHIVE
British Banks Agree to New Measures to Help Homeowners in Light of Interest Rate Increase
The British banks have agreed to give homeowners who miss mortgage payments a year of grace before foreclosing and to protect the credit scores of borrowers who change loan terms.
24 June 2023 · 20:23 UTC
