Mortgage payment holidays extended further

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The FCA has extended mortgage payment holidays further for three more months. The customers struggling to pay their mortgage due to coronavirus will be able to extend their payment holidays for three more months or start making reduced payments, the financial regulator has confirmed today.

The firms will give support to mortgage customers who are either coming to the end of a payment holiday or who are yet to request one.

Mortgage customers now have until the end of October to request a break from payments while repossessions are further blocked.

The Financial Conduct Authority (FCA) published draft guidance last month with proposals for helping those with mortgages, including extending the application period for an initial mortgage holiday until 31 October 2020, so that customers who haven’t had a payment holiday and are experiencing financial difficulty would be able to ask for one up to this date.

The measures proposed have now been confirmed after a brief consultation. So, the guidance will come into force from this Thursday (4 June).

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What the mortgage lenders have to do

  • Customers that have not yet had a payment holiday and who experience financial difficulty have until 31 October 2020 to request one.

  • The current ban on lender repossessions of homes will continue to 31 October 2020. This will ensure people are able to comply with the government’s policy to self-isolate if they need to.
  • Firms will communicate with customers regarding what happens when their payment holiday ends. They should offer a range of options for repaying the missed payments if they are able to resume payments.
  • Lenders will continue to support customers who have already had a payment holiday where they need further help.
  • Firms should contact their 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.

  • Payment holidays offered under this guidance will not have a negative impact on credit files. However, consumers should remember that lenders may use information obtained from other sources, such as bank account information, in their lending decisions.
  • Depending on the customers’ circumstances, firms may make them aware of self-help steps a customer may take or signpost customers towards sources of debt advice. This will be for anyone concerned about managing their money during coronavirus and wants to get back on track.

  • When implementing this guidance, firms should be particularly aware of the needs of their vulnerable customers. For customers who aren’t able to use online services, firms should make it easy for customers to access alternatives.

    This guidance comes into force on 4 June 2020 and only applies to mortgages.

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Christopher Woolard, interim FCA chief executive, 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 restart mortgage payments, it is in their best interests to do so. Customers should talk to their firm about the best option available for them.”

 

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