The FCA has confirmed further help for mortgage borrowers after its latest analysis found that, in addition to the households already behind on payments, 356,000 mortgage borrowers could face payment difficulties by the end of June 2024.
However, this is down from the 570,000 borrowers the FCA previously estimated in September last year due to changes in market expectations of the Bank of England base rate.
Amongst this group, those rolling off a fixed rate deal could end up paying an additional £340 a month on average.
The FCA’s research found that borrowers aged 18-34 and those living in London and the South East are more likely to be financially stretched than the rest of the working age population.
The FCA has now confirmed final mortgage guidance, setting out ways mortgage lenders can help customers worried about or already struggling with their mortgage payments because of the rising cost of living.
Lender support for borrowers
Lenders proactively contacted customers a combined total of 16.5 million times, across a range of channels, to offer support in the last year. Following conversations with the FCA, lenders have confirmed they expect to increase this to 20.5 million contacts over the next year.
Lenders also supported over 2 million customers to manage their finances in the past year, including through budgeting tools, access to debt advice, and tailored mortgage forbearance.
The FCA is also working with the Money and Pensions Service, consumer groups and lenders to raise awareness of the help available to mortgage borrowers worried about keeping up with payments.
FCA guidance
The FCA's finalised guidance confirms how mortgage lenders can support customers who have missed payments or are worried they may not be able to make payments in future. It covers options such as extending the term of their mortgage or making reduced monthly payments for a temporary period.
The regulator stressed that mortgage borrowers should consider carefully any steps they take and customers who can keep up with their payments should continue to do so.
In line with its three-year strategy, the regulator has previously reminded firms of the standards they should meet to support struggling borrowers and where they need to improve their treatment of those in financial difficulty. This follows on from the swift action the FCA took during the pandemic to protect borrowers, including introducing its tailored support guidance.
