Homeowners struggling to pay their mortgage bills will be able to switch to interest-only deals without a formal repayment plan under new plans to help borrowers through the cost of living crisis.
Customers will be able to ditch repayment loans for a temporary period under drafts plans laid out by City watchdog, the Financial Conduct Authority. It announced the plans on Wednesday after attending a roundtable with lenders and the Government to discuss ways to help mortgage borrowers as fears of arrears mount.
The FCA guidance said the plans would help lenders prepare for “providing mortgage forbearance at scale”. Interest-only deals were once prevalent but became heavily regulated after millions of borrowers were sold deals before the financial crisis with no plan on how to repay the capital.
Source: MoneyFacts – [telegraph.co.uk – 7.12.22.]
