UK Finance: Lenders to extend deferrals by maximum of six months
Banks and building societies will extend the mortgage payment deferral period up to a six months maximum until 31 July 2021, according to UK Finance.
Earlier today, the Financial Conduct Authority (FCA) confirmed proposals to enhance support for borrowers affected by coronavirus.
Consumers will have until 31 March 2021 to apply for the extension, however, UK Finance point out that in order to be eligible for the full six month deferral, a consumer will likely need to apply before 31 January.
Eric Leenders, managing director of personal finance at UK Finance, said: “Lenders are continuing to provide unprecedented levels of support to help customers through the COVID-19 crisis.
“As the impact of the pandemic continues to be felt across the country, the banking and finance industry stands ready to deliver ongoing assistance to those in need.”
UK Finance advises consumers who have deferred payments for the maximum six-month period, to contact their lender to discuss tailored support.
A total of 2.6 million mortgage payment deferrals have been made since the start of the pandemic, of which 140,000 are still currently in place.
Leenders added: “All customers whose finances are impacted by the coronavirus will be eligible for a maximum of six months of payment deferrals on their mortgage.
“While it will always be in the long-term interest of customers who are able to do so to resume making payments, all lenders will be providing tailored support for anyone who is still struggling.”
Interest-only and part-and-part customers whose mortgage matured between 20 March 2020 and 31 October 2020 can now also take advantage of a mortgage payment deferral.
And lenders will not enforce repossession and should not seek, or enforce, a warrant for possession before 31 January 2021.
Robin Fieth, chief executive of the Building Societies Association (BSA), said: “Whilst the best advice is always to pay your mortgage if you are able to, anyone who is struggling to do this could benefit from the extension to the mortgage payment deferral scheme or other tailored support that is available from lenders.
“The FCA has been in listening mode throughout the pandemic and their final guidance includes industry suggestions, specifically the ability to top up to six months even if a borrower has had two shorter deferral periods already and not excluding borrowers who have missed a payment after a deferral period from the scheme.”