Guidance for firms supporting borrowers with the cost of living
In March 2023, the FCA issued its guidance for firms supporting existing mortgage borrowers impacted by rising living costs.
1 Finalised guidance comes into effect from 4 November 2024.
The guidance sets out the flexibility firms have when providing forbearance to those who need it, and the scope firms have to vary contract terms for other borrowers who want to reduce their monthly payments.
It covers areas such as:
•providing forbearance;
•contract variations for the purposes of forbearance;
•implications of forbearance arrangements;
•customers not requiring forbearance – but wanting to reduce their monthly payments (contract variations);
•interest rate switches;
•term extensions;
•variation to interest-only mortgages;
•exceptions to the requirement to provide advice.