The FCA has confirmed the support that firms should provide mortgage customers who are either coming to the end of a mortgage payment holiday or who are yet to request one.

The regulator stated that for customers still experiencing temporary payment difficulties due to coronavirus, their options will include a full or part payment holiday for a further three months, while customers yet to apply for a payment holiday will have until 31 October 2020 to apply.

Customers were also reminded that if they can afford to resume payments, they should.

The FCA has also confirmed the current ban on lender repossessions of homes will be continued to 31 October 2020, which it suggested would ensure people are able to comply with the Government’s policy to self-isolate if necessary.

FCA interim chief executive, Christopher Woolard, commented: “The measures we have confirmed today will mean anyone who needs to can get help from their lender, if they are still struggling to pay their mortgage due to coronavirus.

“It is important that if a consumer can afford to restart mortgage payments, it is in their best interests to do so. Customers should talk to their firm about the best option available for them.”

Firms will be expected to communicate with customers regarding what happens when their payment holiday ends, and the FCA indicated they should offer a range of options for how missed payments will be repaid, if they are able to resume payments.

The regulator also stated that payment holidays offered under this guidance will not have a negative impact on credit files, but reminded consumers to remember that lenders may use information obtained from other sources, such as bank account information, in their lending decisions.

Commenting on the FCA’s guidance, Duff & Phelps Compliance and Regulatory Consulting managing director, Mark Turner, suggested: “Today’s pledge from the FCA to continue to support customers struggling to pay their mortgage payments will come as a great relief to many borrowers.
 
“The FCA’s expectation that firms should contact customers about resuming payments and set up appropriate plans with those who can afford it is a clear instruction for firms to be proactive in their approach. Consumers must be aware that payment holiday is not free money and that interest will continue to accrue which will increase their indebtedness, and the amount that has to be repaid in time.
 
“Ultimately, firms and their senior managers will be held accountable for causing avoidable financial harm to customers who take a payment holiday, and firms must ensure they have a clear audit trail showing how they have adhered to FCA’s guidelines and expectations throughout the crisis.”

The latest guidance from the FCA is to come into force on 4 June 2020 and only applies to mortgages. It does not apply to consumer credit products which the FCA added are covered by separate guidance that will be updated at a later date.

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