Mortgage payment holidays extended for a further three months

Jessica Bird

May 22, 2020

HM treasury mortgage holidays extended

HM Treasury has extended the availability of mortgage payment holidays for homeowners for a further three months.

The application period for mortgage holidays has also been extended until 31 October, to allow those who have not accessed one but are experiencing financial difficulty to access the support.

The current ban on repossessions of homes will be continued to 31 October 2020.

The availability of a three month mortgage holiday was first announced in March as part of a package of support for individuals, businesses and the economy.

More than 1.8 million mortgage payment holidays have been taken up since then, with the first due to come to an end in June.

HM Treasury has stated that, where consumers can afford to restart their mortgage payments, it is in their best interest to do so.

The Financial Conduct Authority (FCA) has published draft guidance for lenders, setting out the expectations for firms and the options available to their customers.

For those still experiencing temporary difficulties due to coronavirus, the FCA has stated that firms should continue to offer support, including the option to extend their payment holiday.

The FCA expects firms to contact customers at the end of their payment holiday to find out if they are able to resume repayments, and agree a plan on how this will be done.

This guidance does not prevent firms from providing more favourable forms of assistance to the customer, such as reducing or waiving interest.

The FCA also said firms should consider signposting customers towards sources of debt advice.

The guidance called for firms to be particularly aware of the needs of potentially vulnerable customers, including considering how they interact with customers who are unable to use online services.

John Glen, Economic Secretary to the Treasury, said: “We’re doing everything we can to help people with their finances at this difficult time, and that includes making sure people get the support they need with their mortgages.

“That’s why we’re working with the banks and lenders to extend payment holidays if people need them.

“Everyone’s circumstances will be different, so when homeowners can pay some or all of their mortgage, they should work with their lender on a plan; but if they are still struggling, I want them to know that help is there.”

Christopher Woolard, interim chief executive at the FCA, said: “Our expectations are clear – anyone who continues to need help should get help from their lender.

“We expect firms to work with customers on the best options available for them, paying particular attention to the needs of their vulnerable customers, and to provide information on where to access help and advice.

“Where consumers can afford to restart mortgage payments, it is in their best interests to do so.

“But where they can’t, a range of further support will be available.

“People who are struggling and have not had a mortgage payment holiday, will also continue to be able to apply until 31 October.”

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