Regulator extends mortgage payment holiday ahead of lockdown
The financial watchdog has proposed an extension of the mortgage payment holiday for borrowers struggling to make payments, ahead of a second national lockdown.
The Financial Conduct Authority (FCA) has set out proposals to support consumers through a second lockdown.
Borrowers who have not yet had a payment holiday lasting up to six months, while those who have an initial deferral will be eligible for another payment for up to three months.
Some 2.5 million people have already taken a payment holiday on their mortgage since March, according to figures from industry body UK Finance.
The FCA is also proposing that no one will have their home repossessed without their agreement until after 31 January 2021.
Sheldon Mills, interim Executive Director of Strategy and Competition at the FCA said: “Tailored support will still be offered and remains the most appropriate option for many borrowers, but we are proposing to extend payment deferrals for additional support. We also want to make sure no one has their home repossessed during this time.”
“It is in borrowers’ own long-term interest only to take a payment deferral when absolutely necessary. Those that are able to keep paying, should do so. This allows support to be targeted to those most in need.”
The regulator has asked borrowers not to contact their lender until the enhanced measures are in place. Under the proposals, consumers would have until 31 January 2021 to apply for a payment holiday.
Debt reprieve
The FCA has also extended payment holidays on credit cards, car finance, personal loans and pawnbroking. As with mortgage holidays, consumers who had not yet had a payment deferral under guidance issued in July would be able to request payment holiday lasting up to six months.
It comes as the Chancellor Rishi Sunak outlined further support for businesses today following the Prime Minister’s lockdown announcement over the weekend.
The furlough scheme, which sees the government pay 80 per cent of employees’ wages, has been extended for another month. And the government has extended applications for its coronavirus business support loan schemes.
Applications for the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Large Business Interruption Loan Scheme (CLBILS) will now be open until 31 January, the Treasury said.