The FCA has confirmed its guidance for firms over providing support to mortgage borrowers who are experiencing payment difficulties as a result of the coronavirus crisis.

The guidance will be fully in force from 20 November but the regulator has encouraged firms that are able to start providing the enhanced support sooner to do so.

On 2 November, the FCA revealed that borrowers who have not yet had a payment deferral will be eligible for payment deferrals for six months, while those who currently have a payment deferral will be eligible to top up to six months in total.

Those who have previously had payment deferrals of less than six months will also be able to top up, as long as total deferrals don’t exceed six months, the FCA confirmed. This includes those receiving tailored support and those who are behind on payments.

Consumers will have until 31 March 2021 to apply for an initial or a further payment deferral. After that date, they will be able to extend existing deferrals to 31 July 2021, provided these extensions cover consecutive payments, and subject to the maximum six months allowed. Payment deferrals under these proposals would not be reported as missed payments on a borrower’s credit file, the FCA added.

The latest guidance outlined that borrowers who have already had six months of payment deferrals will not be eligible for a further payment deferral. The regulator stated that firms will provide tailored support “appropriate to their circumstances”, which may include the option to defer further payments.

In October, the FCA issued separate guidance for borrowers with interest only or part-and-part mortgages whose capital repayment plans were affected by coronavirus. This means that borrowers whose mortgages matured from 20 March 2020 can delay the repayment of the capital on their mortgage until 31 October 2021. The FCA has confirmed today that as well as accessing payment deferrals before maturity, these borrowers can access payment deferrals after maturity without this affecting their ability to delay the capital repayment.

The regulator’s latest guidance has also confirmed that no one should have their home repossessed without their agreement until after 31 January 2021.

FCA interim executive director of strategy and competition, Sheldon Mills, said: “Today we have confirmed further support for borrowers struggling financially as a result of coronavirus.

“The announcement we have made today, ensures that the support offered through payment deferrals is as flexible and accessible as possible. This means borrowers will again be able to access payment deferrals up to a maximum of six months.

“However, if you are able to keep paying it will be in your best long-term interest to do so. Payment deferrals should only be taken when absolutely necessary.”

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