Homeowners whose finances have been affected by COVID-19 will be able to apply for mortgage payment holidays of up to six months, despite plans to end this type of financial support on 31 October. The move follows the announcement of a month-long lockdown in England starting on 5 November. On 2 November, The Financial Conduct Authority (FCA) set out proposals to extend the availability of payment holidays. The proposals are as follows:

• If you’ve not yet taken out a payment holiday, you’ll be eligible for two payment deferrals up to a maximum of six months in total.
• If you currently have a payment holiday in place, you’ll be able to apply for one further three-month deferral.
• If you’ve resumed repayments after a payment holiday, you’ll be eligible for another three month deferral.
• If you’ve already had two three-month payment holidays, or have agreed alternative support with your lender, you won’t be eligible for a further deferral.

Borrowers will have up to 31 January to request a payment holiday, and deferrals will not be reported as missed payments on credit files. The FCA has also proposed that the ban on repossessions will be extended to 31 January. Banks have until Thursday 5 November to respond to the proposals, after which the FCA will provide full guidance. A formal payment holiday won’t be shown as a missed payment on your credit file, so it shouldn’t affect your credit score. The FCA has confirmed, however, that customers who seek further support from lenders after their payment holidays end should have this reflected on their credit files. It says doing so will help ensure lenders have an accurate picture of customers’ financial circumstances.