On 2 November 2020, the FCA published a new webpage setting out proposals to provide further support for mortgage borrowers impacted by the COVID-19 pandemic.
The FCA is proposing to extend the availability of payment deferrals to support mortgage borrowers who are experiencing payment difficulties because of coronavirus.
The proposals, if implemented, mean that:
- Those who have not yet had a payment deferral will be eligible for 2 payment deferrals of up to 6 months in total.
- Those who currently have an initial payment deferral will be eligible for another payment deferral of up to 3 months.
- Those who have resumed repayments after an initial payment deferral will be eligible for another payment deferral of up to 3 months.
Under the FCA’s proposals, borrowers would have until 31 January 2021 to request a payment deferral. A payment deferral under these proposals would not be reported as missed payments on a borrower’s credit file. This does not mean that consumers’ ability to access credit will be unaffected in the future, as lenders may take into account a range of information when making lending decisions.
Some borrowers would not be eligible for a payment deferral, including because they either have already had 2 payment deferrals (of up to 6 months in total) or they have agreed alternative support with their lender.
The FCA also states that it is important that borrowers who can afford to make repayments continue to do so.
The FCA is also proposing that no one will have their home repossessed without their agreement until after 31 January 2021.
The deadline for comments on the FCA’s proposals is 10am on 5 November 2020. The final FCA guidance published as soon as possible after the comment period closes.