Mortgages and coronavirus - updated draft guidance for firms

UK Finance has responded to the FCA's consultation paper 'Mortgages and coronavirus: updated draft guidance for firms' (22 May 2020).

Since the risk posed by the Covid-19 virus first became clear, firms reacted swiftly in response to the Chancellor's announcement on 17 March 2020 launching mortgage payment holidays and have mobilised to provide unprecedented levels of customer support. To date over 1.82 million mortgage payment holidays have been granted and lenders have also extended mortgage offers for three months for those who had exchanged contracts and have also agreed to continue offering product transfers to their existing customers, including those on mortgage payment holidays or who have been furloughed so that they do not revert onto a more expensive reversion rate.

We agree with the FCA's comment that ?... where customers can afford to re-start mortgage payments, it is in their best interests to do so ...?, given the cost implications for customers who choose to take a payment deferral. We recognise that further deferred payments may be an appropriate outcome for certain customers who have been identified as requiring support in this way. Our response to the FCA's updated draft guidance provides more detail.

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