FCA to propose limited mortgage deferral scheme

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The Financial Conduct Authority (FCA) is to announce new measures for mortgage borrowers impacted by coronavirus.

This follows the government’s announcement on Saturday of a further lockdown.

To support those financially affected by coronavirus, the FCA is propose that mortgage borrowers who have not yet had a payment deferral can request one. This could last for up to six months. Under the proposals borrowers who already have a payment deferral for a period of less than six months would be able to extend that deferral. This would mean customers would be able to have a payment deferral for a maximum of 6 months.

The regulator says that mortgage borrowers who have already had a six-month payment deferral and are still experiencing payment difficulties should speak to their lender to agree tailored support.

It may also be in the interests of mortgage borrowers who expect to have long-term financial difficulties to agree other forms of tailored support with their lender.

Eric Leenders, managing director of personal finance at UK Finance, said: “Lenders are providing unprecedented levels of support to help customers through the Covid-19 crisis and stand ready to deliver ongoing assistance to those in need. The industry is working closely with the Financial Conduct Authority to ensure customers impacted by the new lockdown measures announced this evening will be able to access the most appropriate support.

“Customers seeking to access this support do not need to contact their lenders yet. Lenders will provide information after 2nd November on how to apply for this support.”

Robin Fieth, chief executive of the Building Societies Association (BSA), added: “Building societies and credit unions recognise the financial pressures on some households and will continue to work hard to support customers in the coming months, working closely with the FCA.”

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