Credit Cards and Mortgages: Coronavirus

Treasury written question – answered at on 18 March 2021.

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Photo of Justin Madders Justin Madders Shadow Minister (Health and Social Care)

To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of extending (a) mortgage and (b) credit card payment holidays during the covid-19 outbreak until September 2021.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

Mortgage and consumer credit payment holidays have helped support borrowers to manage their finances through a period of uncertainty.

Borrowers who have not yet taken a payment holiday are still able to apply for one. Borrowers who have taken an initial payment holiday will be able to top this up to six months. The Financial Conduct Authority’s (FCA’s) guidance released on 17 November sets out that this will remain an option for borrowers until 31 March 2021. However, the FCA guidance also notes that all payment holidays will need to end by 31 July.

For borrowers that have already taken a full six months payment holiday, the FCA’s guidance sets out that firms should continue to provide support through tailored forbearance options. This could include granting new mortgage payment holidays. As borrowers still requiring assistance after that point could be in serious financial distress the FCA believe it is right that lenders are able to understand their financial position in order to lend responsibly.

Over 2.75 million mortgage payment holidays and over 2.5 million consumer credit payment holidays have been provided since the start of the pandemic.

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