Those struggling to pay their mortgage due to COVID-19 will be able extend their mortgage payment holiday for a further three months or begin to make reduced payments.
Since the availability for a three month mortgage holiday was fist announced in March, over 1.8 million mortgage payment holidays were taken up, and the first of these will be coming to an end in June. Lenders will begin to contact those with the mortgage payment holiday ending in June to discuss a way forwards. If consumers can afford to re-start payments, it would be in the best interest to do so, however those still struggling have a full extension of the mortgage holiday for a further three months available to them.
Today, the Financial Conduct Authority (FCA) published a new draft guidance for lenders setting out expectations for firms and the options available to their customers. This includes extending the application period for a mortgage holiday until the 31st October, meaning those who have not yet had a payment holiday but are struggling can still request one. Repossessions of homes will also continue to be banned until the same date.
The Economic Secretary to the Treasury, John Glen said:
“We’re doing everything we can to help people with their finances at this difficult time, and that includes making sure people get the support they need with their mortgages. That’s why we’re working with the banks and lenders to extend payment holidays if people need them.
Everyone’s circumstances will be different, so when homeowners can pay some or all of their mortgage, they should work with their lender on a plan; but if they are still struggling, I want them to know that help is there.”
Christopher Woolard, Interim Chief Executive at the FCA, said:
“Our expectations are clear – anyone who continues to need help should get help from their lender. We expect firms to work with customers on the best options available for them, paying particular attention to the needs of their vulnerable customers, and to provide information on where to access help and advice.”
“Where consumers can afford to re-start mortgage payments, it is in their best interests to do so. But where they can’t, a range of further support will be available. People who are struggling and have not had a mortgage payment holiday, will also continue to be able to apply until 31 October.”
Borrowers in the position to resume with mortgage payments will be given options on how best to do so.