The regulator expects firms to be more flexible to support struggling customers amid the cost-of-living crisis
The Financial Conduct Authority (FCA) has published guidance setting out options that mortgage firms can use to support their customers who are worried about or are already struggling with their mortgage payments due to the cost-of-living crisis.
The regulator said it expect firms to have the flexibility to support their customers in a range of ways that meet their needs.
These support options include extending the term of mortgage, switching to interest-only for a temporary period, moving to a different interest rate, or making reduced monthly payments for a temporary period.
“Most borrowers are able to keep up with their mortgage payments and should continue to do so,” Sheldon Mills, executive director of consumers and competition at the Financial Conduct Authority, said. “But if you’re struggling to pay your mortgage, or are worried you might, you don’t need to struggle alone. Your lender has a range of tools available to help, so you should contact them as soon as possible.”
The FCA also published on its website a support guide for borrowers who are struggling with their mortgage due to higher living costs and interest rate rises. The conduct regulator reminded borrowers that making changes to mortgages, even temporary ones, may result in higher monthly payments in future or paying back more overall. It advised mortgage borrowers to carefully consider any steps they take.
The FCA also attended a roundtable hosted by the government, alongside mortgage lenders to discuss what support some mortgage borrowers may need. It said it will closely monitor the mortgage market and will continue to act so consumers get the support they need.
This latest guidance builds on what the FCA has already done to make sure firms treat customers fairly. It has previously reminded firms of how they should support borrowers and how they need to improve their treatment of those in financial difficulty.
