Support for mortgages and extended credit amid second foreclosure

Mortgage payment holidays are extended for up to six months after the Prime Minister’s weekend announcement of new national coronavirus restrictions in England.

Banks and building societies have agreed with regulators and the Treasury to extend the granting of mortgage payment holidays for up to six months beyond their original deadline of Oct. 31.

Under new guidance, borrowers financially affected by the coronavirus and who have not yet had mortgage payment leave will be entitled to a six-month deferral, while those who have already started mortgage payment leave will be able to complete up to at six months. without it being recorded in their credit report.

The FCA said borrowers should only get help if they need it, and it was important that mortgage borrowers continue to repay if they can afford it.

The regulator also said borrowers who have already had a six-month deferral of payment and are still experiencing payment difficulties, should speak to their lender to agree on tailor-made support.

Eric Leenders, Managing Director of Personal Finance at UK Finance, said: “Lenders are providing unprecedented levels of support to help clients navigate the Covid-19 crisis and are ready to provide ongoing assistance to those in need. need. “

Robin Fieth, Managing Director of the Building Societies Association, added: “Building societies and credit unions recognize the financial pressures on some households and will continue to work hard to support clients in the months to come, working closely with the FCA. “

Mortgage payment holidays were introduced in March and extended in June, to support borrowers who were having difficulty making payments due to coronavirus restrictions.

According to UK Finance, around 162,000 mortgage customers were still in arrears as of October 9, up from a peak of 1.8 million in June.

Consumer credit borrowers

In light of the latest lockdown announcement, the FCA has also extended its temporary rules for troubled credit product customers amid the pandemic.

Proposals released during the first wave of coronavirus required banks to offer a temporary freeze on payments on loans and credit cards until the end of October.

But in an announcement this morning (November 2), the regulator proposed that credit customers who had not yet benefited from a payment deferral under its previous guidelines can now apply for one.

The deferral can last up to six months, and borrowers who currently have a first deferral can also request a second.

For high-cost short-term credits, such as payday loans, the FCA said consumers can request a one-month deferral if they haven’t already had one.

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