borrower with mortgagespersonal loans, credit cards and hire-purchase products have more time to apply for payment vacations Coronavirus Support measures outlined by the Financial Conduct Authority (FCA).
martin lewis explained the new “checkbox suggestions” on the latest episode of The Money Show Live.
Under the FCA proposalsConsumer credit customers who have not yet had a payment holiday still have time to apply for one, and those who have already had one can apply for an extension.
Martin said: “The automatic six-month mortgage payment holiday will almost certainly resume next week, it ended on Saturday 31 October. The Regulatory Authority [FCA] has issued a check box consultation which I’m pretty sure will be held next week.
He continued: “That means you can get six months in total. So if you haven’t had a mortgage payment holiday, apply for a three month one and you may end up getting another three months – almost automatically with almost all mortgage lenders.
“If you already had one, you can end it to get an additional three months – up to a total of six months.”
But Martin reminded viewers of his golden rule for mortgage-paying holidays.
“Take one when you need it, but only if you need it because there’s interest on top of that, so you’ll have to pay that interest later in slightly larger monthly repayments,” he explained.
That consumer champion also said that if you have already received six months of mortgage payment leave, and you still are financial problems because of Covidyou are entitled to bespoke support from your lender.
Martin said: “This form of tailored support could be a reduced payment or a payment holiday, but that gets put on your credit file and could have a much larger impact on your future credit score.”
Among the FCA’s proposalsMortgage borrowers also have until January 31, 2021 to request a deferred payment and final guidance will be released shortly.
But the regulator’s most recent statement made no mention of overdrafts, which is something Martin Lewis is “trying to dig further.”
Many overdraft borrowers have recently seen their overdraft rates double to around 40%. Lenders introduced these rates in response to new rules on how banks can charge overdraft fees.
The industry rules were introduced to make overdraft fee structures clearer and fairer.
Despite no new flat-rate interest-free buffer that FCA said bespoke support for overdraft customers will continue to be available.
This means that banks should help overdraft customers who are still struggling with measures such as reducing or waiving interest, agreeing on a program to gradually reduce their overdraft limit, or transferring the overdraft debt to another form of loan with a better interest rate to have.
The FCA said: “We believe this provides the necessary support to help consumers by tailoring it to those who need it and helping them manage the cost of their borrowing.”
If you are struggling financially as a result ongoing pandemictalk to your lender about assistance.