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Regulator could extend mortgage payment holidays beyond three months
The Financial Conduct Authority has published guidance to lenders that suggests they may need to offer longer payment holidays
The financial watchdog has issued new guidance to lenders that make clear that firms should grant customers a payment holiday for an initial period of three months, where they experience payment difficulties as a result of coronavirus (Covid-19).
It added that it will review this guidance in the next three months and issue amended guidance on extending the period of the payment holiday if appropriate.
Lenders have also been told to ensure that there is no additional fee or charge (other than additional interest) as a result of the payment holiday.
Plus they should try to ensure that the payment holiday does not have a negative impact on your credit score.
The regulator added that, under the current circumstances, repossession will not be in the best interests of the customer. As a result, repossession should not be started or continued with unless the customer has agreed it is in their best interest.
Information for borrowers
The FCA has also published clear information for mortgage borrowers on their rights if they are struggling to pay their mortgage.
It said you should contact your lender if you think you may potentially experience payment difficulties as a result of the coronavirus situation.
Importantly your lender shouldn’t need any evidence that your income has been affected by coronavirus to offer you a payment holiday.
At the end of the agreed payment holiday, if you are still not able to make your full mortgage payments due to coronavirus, then it may offer you a further payment holiday if appropriate to your circumstances.
You can find detailed information from the regulator on Mortgages and Coronavirus on the FCA website.