17 Sep 2020
The Financial Conduct Authority (FCA) has confirmed future support for mortgage borrowers if they continue to face payment difficulties due to the coronavirus (COVID-19).
The regulator has published finalised guidance to ensure support for consumers who have taken payment deferrals and still face financial difficulties, as well as those whose financial situation may be newly affected by the pandemic after 31 October.
Under the FCA's current guidance, borrowers can take a first or second payment deferral, which does not have a negative impact on the borrower's credit file.
However, under additional guidance published, any further support from lenders can be reflected on credit files. Firms are required to be 'clear' about the credit file implications of any support offered.
According to UK Finance, lenders have granted more than two million mortgage payment deferrals since the scheme came into effect in late March.
Commenting on the changes, Eric Leenders, Managing Director of Personal Finance at UK Finance, said: 'Lenders understand that many households will continue to see their finances squeezed as the pandemic continues and will be offering a range of support for those who need it. It is essential that customers speak with their lender to discuss the best solution for them.
'Firms will be communicating with customers whose mortgage payment deferral is coming to an end to discuss the options available. Those who can afford to resume payments should do so, as it will always be in their best interests in the long run.'