FCA Publishes Lender Mortgage Support for Struggling Borrowers

Published / Last Updated on 10/03/2023

The Financial Conduct Authority (FCA) has published the support it expects mortgage lenders to offer mortgage borrowers given cost of living pressure and interest rate increases.  The FCA has taken action to force lenders to help borrowers given the following data:

  • It expects 356,000 mortgage borrowers to get into mortgage payment difficulty by June 2024 (this is lower than their previous estimate last year of 570,000 but is still serious enough to take action).
  • The average borrower’s monthly payment will increase by £340 per month when their lower fixed rate ends.
  • 200,000 borrowers are already in difficulty with payments.

Help Expected From Lenders

The FCA now requires lenders to offer the following when borrowers get into difficulty:

  • Extend the term of the mortgage to keep payments lower.
  • Reduce mortgage payments temporarily (a sort of part-mortgage holiday).

The FCA also warned that borrowers should think very carefully before deciding to extend the term or reducing payments temporarily as this literally a ‘temporary fix’ and actions will likely increase the amount you pay back overall or having higher payments required in the future to get the mortgage ‘back on track’.

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