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03
JUN
2020

FCA confirms support for customers who are struggling to pay their mortgage due to coronavirus

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Yesterday the FCA confirmed the support firms should give to mortgage customers who are either coming to the end of a payment holiday or who are yet to request one.

The FCA also reminded customers that if they can afford to resume payments, they should. For customers still experiencing temporary payment difficulties due to coronavirus (Covid-19), Lenders will offer support, with options including a full or part payment holiday for a further three months. Customers yet to apply for a payment holiday have until 31 October 2020 to do so.

Christopher Woolard, Interim Chief Executive at the FCA, said: ‘The measures we have confirmed today will mean anyone who needs to can get help from their lender, if they are still struggling to pay their mortgage due to coronavirus. It is important that if a consumer can afford to re-start mortgage payments, it is in their best interests to do so. Customers should talk to their firm about the best option available for them.’

The FCA has confirmed the current ban on lender repossessions of homes will be continued to 31 October 2020 and Lenders should offer a range of options for how the missed payments will be repaid, if the borrower is able to resume payments. Over the coming months Lenders will contact customers to find out what they can re-pay and, for those who remain in temporary financial difficulty, offer further support, which will include the option of a further three-month full or part payment holiday. Interestingly the FCA highlighted that although payment holidays will not have a negative impact on credit files, consumers should remember that lenders may use information obtained from other sources, such as bank account information, in their lending decisions.

The guidance comes into force tomorrow and only applies to mortgages. It does not apply to consumer credit products which are covered by separate guidance which will be updated in due course.

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