"Lenders are continuing to provide unprecedented levels of support to help customers through the Covid-19 crisis, with over 2.6 million mortgage payment deferrals already granted."
The extension gives access to customers who have not yet sought support, or who have had a payment deferral of less than six months.
A total of 2.6 million mortgage payment deferrals have so far been granted since the start of the pandemic. Just under 140,000 were still in place at the end of October. Of those mortgage customers whose payment deferral has come to an end, industry analysis from UK Finance suggests that over 80% have now returned to making repayments.
Borrowers will now have until 31 March to apply for an initial or a further payment deferral. After that date, they will be able to extend existing deferrals to no later than 31st July 2021.
UK Finance has recommended that borrowers who are newly impacted by coronavirus and who want to benefit from the maximum six months available "should apply in good time before their February 2021 payment is due".
The final FCA guidance allows payment deferrals that are not consecutive, including for customers in arrears or receiving tailored support.
The FCA has clarified that this updated guidance applies retrospectively from 1st November 2020, coming fully in to force on 20th November 2020. If a customer came to the end of a payment deferral between 31st October and when this latest amended guidance comes into force, and have not had six months of payment deferrals, they will be eligible to apply for a retrospective payment deferral to cover this period.
Interest-only and part-and-part customers whose mortgage matured between 20th March 2020 and 31st October 2020 can now also take advantage of a mortgage payment deferral after their mortgage has matured and will still be able to delay repaying their capital until 31st October 2021.
The FCA has also confirmed that firms will not enforce repossession and should not seek, or enforce, a warrant for possession before 31st January 2021, unless there are exceptional circumstances such as a customer requesting that proceedings continue.
Eric Leenders, managing director of personal finance at UK Finance, said: “Lenders are continuing to provide unprecedented levels of support to help customers through the Covid-19 crisis, with over 2.6 million mortgage payment deferrals already granted. As the impact of the pandemic continues to be felt across the country, the banking and finance industry stands ready to deliver ongoing assistance to those in need.
“All customers whose finances are impacted by the coronavirus will be eligible for a maximum of six months of payment deferrals on their mortgage. While it will always be in the long-term interest of customers who are able to do so to resume making payments, all lenders will be providing tailored support for anyone who is still struggling."
