Chancellor Announces Agreements with Banks to Help Mortgage Holders amidst Interest Rate Hike

The agreements include a 12-month minimum before repossessing homes, allowing borrowers to extend the term of their mortgages or move to an interest-only plan temporarily, and the ability to change their mortgage without impacting their credit score.

The meeting came a day after the Bank of England raised interest rates to the highest level in nearly 15 years in an attempt to reduce inflation.

The Chancellor stressed that tackling inflation is the priority, but resisted offering a support package to mortgage holders, fearing it could fuel inflation further.

The Resolution Foundation has warned that 1.4 million mortgage holders in the UK will have to make additional repayments, which could amount to a fifth of their disposable income.

The average household remortgaging next year is set to see their repayments rise by £2,900.

This comes as the Labour Party has issued a five-point plan to help ease the burden of mortgage payments for homeowners and limit repossessions.

The plan was met with support from banking leaders, including the CEOs of Barclays, Virgin Money, and Nationwide.