The Financial Times reported that Sunak (pictured) is working with the Financial Conduct Authority (FCA) to extend the current three-month period which is due to expire in June.
However, the report noted that it may not be an automatic extension for all the 1.6 million borrowers currently taking a break from mortgage payments.
This suggests that conditions may be attached to any such measure.
Lenders have repeatedly warned that plans need to be put in place for the end of the payment holiday scenario as a sudden stop would not help borrowers or the economy.
Yesterday UK Finance CEO Stephen Jones published a statement noting that “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.
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, with the job retention scheme which allows employers to furlough staff extended until October, the FT suggested there may be no choice other than to extend payment holidays.
The Financial Times also noted that the ban on evictions for tenants was also likely to be extended for at least three months.
This is allowed under the legislation that was passed and the government has said on several occasions that it has been considering whether this was necessary.