Martin Lewis praises Jeremy Hunt's mortgage support plan for homeowners - 'He's listened'

Martin Lewis has praised chancellor Jeremy Hunt after he agreed measures with lenders aimed at helping mortgage holders struggling with high interest rates.

The consumer champion said: “It looks like the chancellor has listened.”

About 2.4 million fixed-rate mortgage deals are also due to expire before the end of 2024, with many households facing huge increases in their bills after the Bank of England raised its interest rate to 5% - the highest in 15 years - on Thursday as part of its attempt to curb high inflation.

It is thought the interest rate may hit 6% by the end of this year, and Hunt summoned bank and building society leaders to Downing Street on Friday to help quell the crisis.

Following the meeting, Hunt said the firms had agreed:

• to implement a 12-month minimum before repossessing homes

• to allow struggling borrowers to extend the term of their mortgages or move to an interest-only plan temporarily “no questions asked, no impact on your credit score"

Lewis, the founder of Money Saving Expert, a website research has found more people trust for financial advice than banks themselves, suggested it was good news amid the "nightmare for many with variable mortgages and those coming off fixes".

Watch: Financial analyst responds as Bank of England hikes interest rates to 15-year high

"The most important thing we can focus on right now is appropriate, flexible forbearance measures," Lewis said. "While the Bank of England’s aim is intended to squeeze people’s disposable incomes, no one wants people’s lives to be ruined by arrears and repossessions - and that is the urgent protection we need to focus on.

“I met the chancellor on Wednesday and reiterated that the minimum we needed was to ensure that when people asked for help from lenders, they knew that if things changed, it wouldn’t be detrimental to their financial situation and their credit scores would be protected as much as possible.

“I’m pleased to see it looks like the chancellor has listened."

Hunt, however, is continuing to resist calls, including from some Tory backbenchers, to offer a major support package to mortgage holders.

He fears it could further fuel inflation, which remained at 8.7% in May, despite hopes from economists it would fall.

There have been warnings 1.4 million mortgage holders will lose at least a fifth of their disposable income in additional repayments.

They are set to rise by £2,900 for the average household remortgaging next year, according to economists at the Resolution Foundation.

Labour has called for banks to be forced to give more help to struggling mortgage holders.

Read more: Mortgage increases: What Jeremy Hunt just announced and how the crisis could affect you

Shadow chancellor Rachel Reeves, responding to Hunt's measures, said: “Today’s weak response from the government on a mortgage crisis they created shows just how little they understand what families are facing.

“Questions remain on how voluntary these measures are. The government must offer clarity and confidence to homeowners by putting in place requirements now to reassure households."

But Hunt defended the extent of his measures - and referred to how he had aligned with Lewis's demands.

"[These are assurances] that people like Martin Lewis have been saying will make a big difference for families in those situations.”