The FCA has confirmed the introduction of measures to support some closed book mortgage borrowers, some of whom may be mortgage prisoners.
It has also issued guidance to help borrowers with interest-only and partial capital repayment (part-and-part) mortgages whose mortgages have matured since 20 March 2020 or will do so in the next 12 months, given the impact of the Covid-19 (coronavirus) pandemic.
The measures announced are:
- making a new rule that will make it easier for lenders to offer switching options to consumers who are in a closed book within the same financial group. This would mirror the flexibility that active lenders have, under our existing rules, when their existing customers wish to switch.
- issuing guidance stating that firms should allow borrowers to delay repayment of the capital at maturity on interest-only and part-and-part mortgages up to 31 October 2021, provided borrowers are up-to-date with payments and they continue to make interest payments
The rule will come into force from 23 October 2020. The guidance will come into force from 31 October 2020.
The FCA’s consultation, which closed on 8 September, can be viewed here.