"Firms should be clear about the credit file implications of any forms of support offered to borrowers."
The regulator says that of the customers who have already had a payment holiday, "many will remain in financial difficulty".
The current guidance - which allows borrowers to take a first or second three-month payment deferral - is due to expire on the 31st of October.
The FCA says after this period, lenders should offer a "range of different short and long-term support options to reflect the specific circumstances of their customers". This could include extending the repayment term or restructuring of the mortgage. Where consumers need further short-term support, the FCA says lenders should offer arrangements for no or reduced payments for a specified period to give customers time to get back on track.
Where borrowers require further support from lenders, either at the end of payment holidays or where they are in need of support for the first time, the FCA confirmed that this would be "reflected on credit files in accordance with normal reporting processes".
In a statement, the regulator said: "This will help to ensure that lenders have an accurate picture of consumers’ financial circumstances and reduce the risk of unaffordable lending. Firms should be clear about the credit file implications of any forms of support offered to borrowers."
Christopher Woolard, interim chief executive at the FCA, said: “It is important that consumers who can afford to resume mortgage payments should do so. However, we understand that borrowers facing payment difficulties because of the pandemic will continue to face uncertainty and may also experience temporary interruptions in income. We are proposing that firms contact their borrowers in good time before the end of a payment holiday, and work with them to come up with a tailored plan to help get them back on track. Firms should not take a ‘one size fits all’ approach.”
