Lenders will extend payment holidays if needed
The Financial Conduct Authority has updated its guidance for mortgage customers affected by coronavirus, asking lenders to enable further payment holidays if required.
Lenders have committed to offer ongoing support, including through the extension of mortgage payment holidays if appropriate.
Latest figures from UK Finance show 1.86 million mortgage payment holidays have been issued as of 28 May 2020 – equivalent to one in six mortgages.
Lenders are also committed to continuing the ban on repossessions for residential and buy-to-let customers to 31 October 2020, helping provide borrowers with reassurance that they will not have their homes repossessed at this difficult time.
Stephen Jones, UK Finance CEO, said: “For those customers who are nearing the end of their three-month payment holiday, providers are offering them help and flexibility to choose the next steps which best suit their needs. It will always be in the borrower’s best interests to pay their mortgage if they are able as this will reduce the level of their repayments in the long run but for those customers who are struggling, help is available.
“The extension of the payment holiday scheme until 31 October 2020 for customers yet to take to one will provide much-needed breathing space for those who need it, while the continued moratorium on involuntary repossession will ensure no homeowner loses their home because of the impact of Covid-19 on their finances.
“A payment holiday may not be the right choice for everyone, and borrowers should only apply if they need one. Any borrower who is concerned about their financial situation should check with their lender as early as possible, with providers’ website giving the latest information on the support available.”