FCA issues further mortgage support guidance

Coronavirus,

The Financial Conduct Authority (FCA) has announced new proposals to ensure that mortgage providers provide “tailored support” to borrowers facing pandemic related payment issues.

The draft guidance suggests that lenders offer a menu of options to customers that’s based on their particular circumstances rather than a standard approach. These options could include extending the mortgage term, restructuring the mortgage, or suspending or reducing payments for an agreed period of time.

In March, three-month payment holidays were announced by the Government for anyone struggling financially because of Coronavirus. This was then extended in May, and the deadline for applications was extended to the 31st October.

According to the FCA, most customers who have taken the opportunity of a payment holiday are now expected to resume their normal repayment schedule, but it’s likely that many will be unable to do so.

The FCA said it expects the current guidance to expire on 31st October, but will keep this under review depending on how the wider situation develops.

Christopher Woolard, interim CEO at the FCA, said: ‘It is important that consumers who can afford to resume mortgage payments should do so. However, we understand that borrowers facing payment difficulties because of the pandemic will continue to face uncertainty and may also experience temporary interruptions in income. We are proposing that firms contact their borrowers in good time before the end of a payment holiday, and work with them to come up with a tailored plan to help get them back on track. Firms should not take a ‘one size fits all’ approach.’

As ever, our advice would be to ensure that you contact your lender as soon as you become aware that you may not be able to resume your payments.