Will activating the mortgage charter reduce the mortgage offers my bank offers me when I renew?

DuckingtheBullets

I am an ultra low rate repayment mortgage which expires in September. Right now I would like to take advantage of the mortgage charter to free up some extra cash as I am still refurbishing my home. I also do not want to lock into a new mortgage deal until August as interest rates are anticipated to fall further. My bank allows me to transfer my existing mortgage to a new deal online without affordability checks, credit checks or underwriting.  My question is, if I choose to activate the mortgage charter now and go interest only for the next five months, will the bank limit the future mortgage deals it is willing to offer me because I used the charter?

born_again

This Charter builds on the work we and lenders have done over recent years to ensure those who get into difficulty receive the support they need.

So in effect they may view it as you are in difficulty.

Hoenir

There's no certainty that mortgage rates will fall significantly. Events elsewhere may have considerable influence .

DuckingtheBullets

Thanks for replies. I am not in difficulty. I would be utilising a mechanism to increase cash flow for a few months to continue some renovation projects. I have substantial equity in the property (76%). Further renovation will increase equity further as the value of the house rises as more work is progressed. I am wondering if the mortgage charter is actually a benefit to mortgage owners or it is trojan horse that banks use to recategorise borrowers and perceive them inaccurately as higher risk.

silvercar

If nothing else, it shows you have a need to increase cash flow. 

caprikid1

"charter is actually a benefit to mortgage owners or it is trojan horse that banks use to recategorise borrowers and perceive them inaccurately as higher risk."

The charter is there to help homeowners in difficulty, it is not there to manage cash in the way that you propose.

If you choose to use it as a vehicle to fund renovations (Not what it was intended for) then you will be flagged as potentially being in financial stress or difficulty.

Hoenir

DuckingtheBullets said:

 I am wondering if the mortgage charter is actually a benefit to mortgage owners or it is trojan horse that banks use to recategorise borrowers and perceive them inaccurately as higher risk.

It's there to assist those in temporary financial difficulty. People frequently lose their jobs with zero advance warning.  Naturally those in financial difficulty will be a higher risk. Lenders don't have a micro insight into everyone's personal financial affairs. A line has to be drawn somewhere.