The Financial Conduct Authority (FCA) has confirmed its support for mortgage borrowers who are struggling to keep up with payments due to the rising cost of living.
The regulator has set out new guidance for mortgage lenders, detailing the various ways they can help customers who are already in difficulty or are worried about falling behind on payments.
The FCA has also released new data and analysis of the mortgage market, which shows that 356,000 borrowers could face payment difficulties by the end of June 2024.
However, this is a reduction of 214,000 from the previous estimate of 570,000 borrowers made in September 2022, due to changes in market expectations of the Bank of England base rate.
Those rolling off a fixed-rate deal could end up paying an additional £340 a month on average.
Sheldon Mills, executive director of consumers and competition at the FCA, urged borrowers to contact their lenders as soon as possible if they are struggling with their mortgage payments or have concerns about their ability to meet their commitments.
He emphasised that lenders have a range of tools available to help, and that just talking to them about their options won’t affect their credit rating.
Mills said: “Our research shows most people are keeping up with mortgage repayments, but some may face difficulties.
“If you’re struggling to pay your mortgage, or are worried you might, you don’t need to manage alone.
“Your lender has a range of tools available to help. Get in touch as soon as you have concerns, don’t wait until you’re about to miss a payment before doing so.
“Just talking to them about your options won’t affect your credit rating.”
The FCA’s research found that borrowers aged 18-34 are more likely to be financially stretched than the rest of the working-age population.
Those living in London and the South East are most likely to be stretched. However, being stretched does not necessarily mean borrowers will miss payments, as some may be able to use savings, reduce spending, or increase their income to meet their mortgage commitments.
In addition to contacting their lender, borrowers can also visit MoneyHelper for useful money tips, budgeting tools, and free expert debt advice.
The FCA’s guidance and support for struggling mortgage borrowers will provide much-needed relief to those who are feeling the strain of the rising cost of living.
