FCA Extension on Mortgage Payment Holidays - Which? response

Response to the updated FCA’s guidance on payment deferrals and tailored support for mortgage firms to support customers in financial difficulty as a result of coronavirus.

We strongly support the extension of payment deferrals as it reflects the ongoing and evolving nature of the crisis. We are pleased that consumers who will need to access temporary support for the first time will now be treated fairly, and we welcome the recognition that there will be some consumers who have already had a payment deferral but are still in temporary financial difficulty.

It is unclear, however, how the proposed guidance enacts the policy intent expressed by HM Treasury and FCA that consumers will be able to access a 6 month payment deferral. The payment deferral guidance is proposed to be disapplied from 31 January, and its provisions only allow for a deferral of up to 3 months to be granted at any time. Therefore we cannot see how a consumer who has not yet needed financial support would be able to access a payment deferral for longer than 3 months. We would like the guidance to be clearer around consumer entitlement to a total deferral period of 6 months.