Mortgage payment holidays were extended by three months following a new lockdown announcement by Boris Johnson on Saturday, October 31.
To curb the rise in the number of new coronavirus cases, England entered a month-long national lockdown on Thursday, November 5.
The Financial Conduct Authority’s City Watchdog said that mortgage borrowers who have not yet applied for a payment deferral could do so for up to six months, while those who already have a payment deferral for a period can extend their payment holiday for up to six months.
Anyone who has already had a mortgage holiday for six months would not automatically be eligible for additional aid. “Mortgage borrowers who have already had the maximum deferral of payment should talk to their lender to agree on “tailored assistance.
This could include paying off each month only the interest accrued, or resuming payments but at a lower level than before.
When interest continues to accrue during a holiday period, those who can afford to pay should continue to make repayments, meaning that borrowers will pay back much more in the long run.
Nearly two million homeowners told their mortgage lenders in June that they could not meet their monthly repayments, with a monthly average of £755 being deferred.
“We will work with trade bodies and lenders on how to implement this as quickly as possible and will make another announcement on November 2,” the FCA spokesman said.
At this stage, those who are looking to take up or extend a mortgage holiday should not contact their lenders. “Lenders will soon be providing information on what this means for their clients and how to apply for this assistance,” he said.
The FCA is also considering whether a similar extension should be applied to high-cost loans.