The regulator is proposing that anyone who has not used the mortgage support scheme can request two payment deferrals of up to six months in total, before the end of January.

Borrowers who are currently on their first three-month payment break, or households who have taken an initial deferment and have since begun repaying, will be eligible to defer their mortgage payments by another three months.

The consultation follows Prime Minister Boris Johnson’s Saturday evening address to the country to usher in the next lockdown from Thursday 31 October.

As businesses get ready to shut once more, the government has extended its Coronavirus Job Retention Scheme and mortgage payment deferral scheme to support households suffering financial hardship because of the pandemic.

Borrowers, however, are being urged to only use the mortgage scheme if they not able to keep up with their monthly commitments.

Sheldon Mills, interim executive director of strategy and competition at the FCA, said: “Tailored support will still be offered and remains the most appropriate option for many borrowers, but we are proposing to extend payment deferrals for additional support. We also want to make sure no one has their home repossessed during this time.

“It is in borrowers’ own long-term interest only to take a payment deferral when absolutely necessary. Those that are able to keep paying, should do so. This allows support to be targeted to those most in need.”

Under the FCA’s proposals, a payment deferral would not be reported as a missed payment on the borrower’s credit file, but the borrower’s ability to obtain credit in the future could still be affected.

If borrowers are offered tailored support from their lender this can be recorded on the borrower’s credit file. Lenders should tell borrowers where this is the case.

Households who have already had two payment deferrals of up to six months in total, or those who have agreed alternative repayment support, will not be eligible for further help under the scheme.

Responding to the regulator’s announcement, Robin Fieth, chief executive of the Building Societies Association (BSA), said: “We recognise that the ongoing economic issues being caused by the pandemic are generating significant challenges for some households. Hence the extension of this payment deferral scheme.

“For those with a mortgage the best advice will always be to continue to pay if you can, and to discuss any concerns early with your lender. For those who are having difficulties, a payment deferral for a total of six months followed by ongoing tailored support are available. Lenders are working hard to support their customers through this time.”

Eric Leenders, managing director of personal finance at UK Finance, said: “Lenders are continuing to provide unprecedented levels of support to help customers through the Covid-19 crisis and have been working closely with the FCA to ensure that customers impacted by the new lockdown measures will be able to access the assistance they need, including being able to defer payments on their mortgages where this can help.

“While these arrangements are being put in place customers seeking to access this support do not need to contact their lenders yet. Lenders will provide information shortly on how to apply for this support.”

The regulator is also proposing that no one will have their home repossessed without their agreement until after 31 January 2021.

The consultation closes at 10am on Thursday 5 November. Final guidance will be published as soon as possible after the comment period closes.