Mortgage holiday: FCA set out new extension proposals today – full details revealed

Mortgage holidays were among the first support measures set forward by Rishi Sunak. Today, the FCA has set out proposals which outline the potential options firms will be required to provide customers coming to an end of a payment holiday, as well as those who are yet to request one.


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According to the announcement, the FCA are proposing that for customers yet to request a payment holiday, the time frame for applying should be extended to October 31 2020.

On top of this, the FCA are calling for lenders to extend payment holidays by a further three months for customers still struggling.

Christopher Woolard, the Interim Chief Executive at the FCA, made the following comments with the announcement: “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.

READ: Mortgage: The first set of payment holidays will end next month 

‘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 31 October.”

If the proposals are confirmed, the FCA expects the following to occur:

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  • Customers who can afford to return to full repayment should do so in their best interests – at the end of a payment holiday, firms should contact their customers to find out if they can resume payments and if so, agree a plan on how the missed payments will be repaid.
  • Anyone who continues to need help gets help – lenders should continue to support customers who have already had a payment holiday where they need further help. Firms are expected to engage with their customers and find out what they can re-pay and, for those who remain in temporary financial difficulty, offer further support. As part of this firms should consider a further three-month payment holiday.
  • Extending the time the scheme is available to people who may be impacted at a later date – customers that have not yet had a payment holiday and experiencing financial difficulty will be able to request one until October 31 2020.
  • Keeping a roof over people’s head during a public health crisis – the current ban on repossessions of homes will be continued to October 31 2020. This will ensure people are able to comply with the government’s policy to self-isolate if they need to.
  • Payment holidays and partial payment holidays offered under this guidance should not have a negative impact on credit files. However, consumers should remember that credit files aren’t the only source of information which lenders can use to assess creditworthiness.


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The FCA detailed that they are currently welcoming comments on the proposals.

They will be reviewing this until 5pm on May 26 and they expect to finalise the guidance shortly afterwards.

It is also highlighted that this guidance only applies to mortgages.

The proposals will not apply to consumer credit products which is covered by separate guidance which will be updated “in due course”.

The announcement came out early this morning but it has already caught the attention of organisations within the field.

Robin Fieth, the Chief Executive of the Building Societies Association (BSA), commented on eh proposals: “Mortgage payment holidays will continue to be available until October 31 for those who have not had one.

“We are pleased that there will be no automatic blanket extension to existing payment holidays as we do not believe extending payment holidays will be in the best interests of most borrowers, although individual extensions remain an option which may be right for some.

“Possession is always a last resort for lenders and with the extension of the repossessions moratorium, homeowners should also be reassured that they are secure in their own homes.

“Lenders will be contacting all borrowers with a repayment holiday before it comes to an end to lay out potential next steps and the support that is available.

“Any borrower with concerns is encouraged to get in touch with their lender sooner rather than later.”

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