On 17 November the FCA confirmed guidance for homeowners struggling financially due to coronavirus. The mortgage payment holidays scheme, first announced in March and then extended in May, has been further extended until 31 March 2021.
How does it work?
- Those who have not yet had a payment holiday will be eligible for payment holidays of 6 months in total.
- Those who currently have a payment holiday will be eligible to top up to 6 months in total.
- Those who have previously had payment deferrals of less than 6 months will be able to top up, as long as total deferrals don’t exceed 6 months. This includes those receiving tailored support and those who are behind on payments.
- Borrowers who have already had 6 months of payment holiday will not be eligible for a further payment holiday. Firms will provide tailored support appropriate to their circumstances. This may include the option to defer further payments.
The FCA has also confirmed that no one should have their home repossessed without their agreement until after 31 January 2021.
Borrowers with an interest-only (or part-and-part mortgages) that matures between 20 March 2020 and 31 October 2021 can delay the repayment of capital until 31 October 2021, providing they continue to make interest payments.
Some lenders have offered tailored support to borrowers. Lenders will discuss your individual circumstances to support to customers in a way that reflects the uncertainties and challenges many customers will be experiencing due to coronavirus.
Who to talk to
You should try to maintain your mortgage payments if you can afford to do so. If you want to apply for or extend an existing payment holiday, it is crucial that you speak to your lender. You must not stop making mortgage payments without speaking to your lender first as this could adversely affect your credit.