Lenders will offer a package of measures to borowers struggling to meet their repayments.

The announcement comes following the chancellor’s mortgage summit with major lenders on Friday morning.

The summit was convened after sharp rises to interest rates this week, putting more pressure on mortgage borrowers.

What’s been announced?

A package of measures has been announced to give borrowers more flexibility, although some were already being done in practice by many lenders.

Breathing space: Borrowers will be able to make changes to their mortgage for a short period to reduce monthly repayments, including switching to interest-only payments or lengthening the mortgage term.

Ability to switch back: Borrowers will be able to return to their original mortgage terms within six months, without the temporary change impacting their credit score. Although it’s important to remember that, while your credit score may not be affected, missed payments or other changes to your mortgage could impact your future borrowing ability.

Delay in repossession proceedings: Lenders have agreed to a 12-month delay in initiating repossession proceedings against borrowers who aren’t meeting long-term payment obligations.

Karen Noye, mortgage expert at Quilter, said: “The discussions have resulted in increased flexibility and support measures aimed at alleviating the financial burden on borrowers. For individuals worried about their mortgage payments, it is essential to understand the available options and take proactive steps to manage their finances effectively.

“While these developments provide some relief, it is essential for borrowers to be proactive in managing their finances during this challenging period. Seeking professional advice from qualified mortgage professionals, debt management charities, or organisations like Citizens Advice can provide valuable guidance on budgeting and financial planning. These resources can assist borrowers in assessing their financial capabilities, exploring cost-cutting measures, and identifying additional sources of income.

“However, the government has dismissed suggestions of direct financial support, as it aims to support the Bank of England’s battle against inflation. As interest rates rise, it is crucial for borrowers to evaluate their mortgage deals and consider taking action before fixed-rate agreements expire. Engaging with mortgage brokers or lenders well in advance of the expiration date can help secure favourable deals and mitigate the impact of rising rates.”

But the Liberal Democrats criticised the measures. Treasury spokesperson Sarah Olney MP said: “This is a sticking plaster for a gushing wound. Even after today, bailiffs will still be knocking on people’s doors because the Government refused to help.

“Struggling families still face the looming prospect of losing their homes because the Government crashed the economy and sent mortgage bills spiraling.

“Britain is facing a mortgage crisis and we have a Chancellor who simply isn’t up to the job. Jeremy Hunt is failing on his inflation target and now failing to help families with the consequences.

“It adds insult to injury that there is still no help for renters who face unbearable payments. Jeremy Hunt is failing families and pensioners. If he is not going to take decisive action then he should step aside.”