UK Finance CEO Stephen Jones explained that solving this dilemma was one of the critical areas of focus for the financial services industry.
In a newsletter statement Jones said: “One in seven mortgages are now covered by payment holidays of up to three months. For the average mortgage holder, the payment holiday amounts to £755 per month of suspended payments.
“However, the focus is now on how we can continue to support borrowers once the three-month payment holiday comes to an end.
“The Financial Conduct Authority (FCA) has been meeting with banks to discuss what support measures should be put in place and we will continue to work with government and regulators to ensure we find the best solutions for borrowers.”
He added that lenders have also renewed and expanded the commitment to help existing mortgage customers make product transfers.
Extension would not help borrowers
However, at present the initial three-month payment holiday period is due to end in June with no plans yet announced for what will come after.
Earlier this month, Barclays Bank UK CEO Matt Hammerstein told the Treasury Select Committee of MPs that extending mortgage payment holidays past the initial three-month period was unlikely to help borrowers or the economy recover from the financial effects of the coronavirus crisis.
However, reports also emerged that the FCA has been considering extending payment holidays by a year.
At the last count according to UK Finance there were around 1.6 million borrowers on mortgage payment holidays, accounting for around one in seven loans.