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Mortgage payment holiday window extended for six months

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  • 02/11/2020
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Mortgage payment holiday window extended for six months
Rules allowing borrowers in financial distress because of the coronavirus crisis to take a mortgage payment holiday will be extended for a further six months, the Financial Conduct Authority (FCA) has announced.

 

This means borrowers who have not yet taken a payment holiday but find themselves needing to do so, will be able to for up to six months.

And those who have taken one three-month holiday will be able to take a further one.

However, borrowers who have already used a full six-month payment holiday must seek support from their lender.

Customers are being urged not to contact their lenders yet.

Banks and building societies have already agreed the move with the regulator and the FCA said it was working with trade bodies and lenders on how to implement this as quickly as possible.

The regulator will be publishing a consultation on the updated guidance today which will clarify the details further.

 

Make payments if you can

Its announcement came alongside the prime minister’s confirmation of a further lockdown for England starting on 5 November running until at least 2 December.

“It is important that mortgage borrowers who can afford to do so continue to make repayments. Borrowers should only take up this support if they need it,” the FCA said.

It added: “Lenders will provide information soon on what this means for their customers and how to apply for this support.

“It may also be in the interests of mortgage borrowers who expect to have long-term financial difficulties to agree other forms of tailored support with their lender.”

 

Lender support

Trade bodies UK Finance and the Building Societies Association (BSA) echoed their support for the measures.

UK Finance managing director of personal finance Eric Leenders said: “Lenders are providing unprecedented levels of support to help customers through the Covid-19 crisis and stand ready to deliver ongoing assistance to those in need.

“The industry is working closely with the FCA to ensure customers impacted by the new lockdown measures will be able to access the most appropriate support.

“Customers seeking to access this support do not need to contact their lenders yet. Lenders will provide information after 2 November on how to apply for this support.”

BSA chief executive Robin Fieth added: “Building societies and credit unions recognise the financial pressures on some households and will continue to work hard to support customers in the coming months, working closely with the FCA.”

Mark Harris, chief executive of SPF Private Clients said it was good to see such decisive action taken so quickly.

“Many borrowers will be worrying about paying their mortgage and extending payment deferrals for a further six months will provide them with some comfort.

“However, the advice remains the same – only ask for a payment deferral if you need one.

“Interest will still rack up and you will have more to pay off in the long run so the option should only be utilised by those who really need it.”

 

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