The Financial Conduct Authority (FCA) has issued new guidance for mortgage lenders concerning how to help any of their customers who are finding the cost of living crisis to affect their ability to repay loans.
This industry regulator is instructing lenders of their requirement to assist borrowers in these situations. Among the suggestions that it provides in its guide are to let people struggling to meet repayments pay lower amounts each month for a certain period of time, as well as to make the term of repayment longer to reduce the monthly sums due.
It has, however, also issued a warning to those with mortgages that either of these options could mean that they wind up having to pay back more in the end, or face higher repayments per month at a later date.
According to FT Adviser, the guidance states that:
“Mortgage borrowers should consider carefully any steps they take and customers who can keep up with their payments should continue to do so.”
Fresh industry figures that the FCA published at the same time as its new guidance show that 356,000 people in the UK who have a mortgage are at risk of falling behind with payments by the summer of next year.
Although undoubtedly concerning, that figure is actually below what the FCA had forecast during the autumn of last year. Back then it was predicting that those struggling with mortgage payments by summer 2024 would be 570,000.
Talking to someone with CeMAP mortgage advisor training can help struggling borrowers decide on the best course.
