Jeremy Hunt and major banks agreed measures to help ease the pain of rising rates. Vicky Shaw looks at what this means for people who are struggling with their mortgage payments:

Personal finance experts have given a cautious welcome to Jeremy Hunt’s deal with lenders to ease the situation for struggling homeowners.

But one finance expert said it would be “unlikely to stem the tidal wave of worry” that homeowners are facing:

HSBC UK said it planned to boost rates on cash savings following the base rate rise.

A spokesman said: “Following a review, we will be increasing rates shortly and making other changes, and we will be in a position to share the specifics early next week.

“But we fully support the government calls for customers to contact their bank or building society at the earliest opportunity if they have money worries, as it will not affect their credit score.”

Shadow chancellor Rachel Reeves slammed the government for not giving direct financial support to mortgage-holders.

“The government’s failure today to make its measures on mortgages mandatory means around 2 million households will miss out on the mortgage support they need,” she tweeted.

“The government’s chaotic approach this week gives little confidence that they’ve got a grip on what families face. They should take responsibility, and adopt Labour’s plan to ease the Tory mortgage crisis.”

The full measures agreed by lenders are:

• Customers approaching the end of a fixed-rate deal will have the chance to lock in a deal up to six months ahead, and may also apply for a better deal right up until their new term starts, if one is available.
• Borrowers may switch to an interest-only mortgage for six months or extend their mortgage term to reduce their monthly payments and switch back to their original term within the first six months. Both options can be taken without a new affordability check or affecting their credit score.
• Support for customers who are up-to-date with payments to switch to a new mortgage deal at the end of their existing fixed rate deal without another affordability check.
• Lenders should provide “well-timed” information to help homeowners plan should their current rate be due to end.
• Lenders will offer tailored support for anyone struggling and deploy highly trained staff to help customers. This could mean extending their term to reduce their payments or offering a switch to interest-only payments, as well as options such as a temporary payment deferral or part interest-part repayment deal.
• Anyone worried about their mortgage repayments can call their lender for information and support, without any impact on their credit score.
• Borrowers will not be forced to have their homes repossessed within 12 months from their first missed payment.

ICYMI: Many households across the UK are sitting on a mortgage ticking time bomb:

Financial markets are predicting that interest rates will hit a high of 6% by the end of the year.

There have been warnings that 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.

More than 80 per cent of homeowners with a mortgage are on fixed-rate deals, according to trade association UK Finance.

However, around 2.4 million fixed-rate mortgage deals are due to end before the end of next year, with some potentially heading for a bill shock.

Consumer campaigner Martin Lewis says it seems “absolutely outrageous” that rates for savers are lagging behind rates for mortgage borrowers:

Liberal Democrat Treasury spokeswoman Sarah Olney branded Jeremy Hunt’s deal with lenders as “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,” she said.

The SNP’s Social Justice spokesperson David Linden welcomed action on repossessions but described the measures as “paper thin”.

Shadow chancellor Rachel Reeves slated the “weak” response from the government on “a mortgage crisis they created”.

It shows just how little they understand what families are facing, she claimed.

“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.

“Instead of shrugging their shoulders, the Tories should be taking responsibility and acting now.”