New Support For Struggling Mortgage Borrowers | moneyfacts.co.uk

Derin Clark

Derin Clark

Online Reporter
Published: 26/08/2020

Today the Financial Conduct Authority (FCA) has announced new guidelines designed to help mortgage borrowers struggling to make repayments due to the Coronavirus pandemic.

Under the new guidelines, mortgage lenders will have to offer tailored support to those already facing financial difficulty due to the pandemic or who are newly impacted by the crisis. In addition to this, lenders will also have to ensure that the support they offer reflects the uncertainties and challenges many borrowers will face in the coming months.

At the moment, the current support given to mortgage borrowers, which includes repayment holidays, will last until the 31 October 2020, but the FCA has stated that it “will keep this under review depending on how the wider situation develops”.

The new proposed guidelines will include a range of long and short-term support options available to struggling borrowers. These options could include extending the repayment term or restructuring of the mortgage. Lenders will also be able to offer no or reduced payments for a specified short-term period.

Borrowers who are able to resume full repayments are encouraged to do this as quickly as they are able, while consumers taking payment holidays or reduced payments should keep in mind that interest continues to be accumulated during this period.

Commenting on the new proposals, Christopher Woolard, interim chief executive 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.”

Consumers who are struggling to meet mortgage repayments should contact their lender immediately to discuss their options. Those who are struggling with debt can also get information and support from Citizen Advice or a free debt charity.

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