Homeowners struggling to pay their mortgages during the coronavirus pandemic will be allowed to take a payment holiday for another three months.
Proposals to extend the freeze or allow owners to reduce payments until October 31 have been announced by the Financial Conduct Authority (FCA), as the first three-month holiday comes to an end in June.
Mortgage holidays allow people to defer payments without affecting their credit rating – although they may face higher monthly bills when the break ends.
The FCA warned that homeowners should keep making their mortgage payments if they can afford it.
A ban on lenders repossessing homes in response to unpaid bills will also be extended until the end of October.
The availability of a three-month mortgage holiday was first announced in March as part of a package of support for people, businesses and the economy.
More than 1.8m mortgage payment holidays were taken up by homeowners across the United Kingdom.
‘Our expectations are clear – anyone who continues to need help should get help from their lender.’Christopher Woolard, interim chief executive of Financial Conduct Authority
The Financial Conduct Authority (FCA) has published new draft guidance for lenders which will set out the expectations for firms and the options available to their customer.
Christopher Woolard, interim chief executive of the FCA, said: “Our expectations are clear – anyone who continues to need help should get help from their lender.
“We expect firms to work with customers on the best options available for them, paying particular attention to the needs of their vulnerable customers, and to provide information on where to access help and advice.
“Where consumers can afford to re-start mortgage payments, it is in their best interests to do so.
“But where they can’t, a range of further support will be available. People who are struggling and have not had a payment holiday, will continue to be able to apply until October 31.”