The FCA has confirmed a raft of measures to support borrowers who need to take a mortgage payment holiday due to Covid-19-related issues.

It has, however, tempered this with a warning that those who can afford to resume payments should do so.

The regulator says that anybody who needs to take a mortgage payment holiday now has until 31 October 2020 to apply, and that the ban on repossessions currently in place will continue until this date.

It adds that firms should be in communication with borrowers to discuss what to when the payment holiday ends and provide a “range of options” for how missed payments should be handled.

The FCA also says that borrowers who have already taken a mortgage payment holiday should be given support if necessary. This will include an option of a three-month full or part-payment holiday extension.

However, the regulator concludes that while taken a payment will not have a negative impact on credit files, “consumers should remember that lenders may use information obtained from other sources, such as bank account information, in their lending decisions.”

Only last week, Nationwide chief executive Joe Garner brought this point up when talking to the BBC and suggested the possibility of flagging those who had taken a holiday albeit not with a “big black mark” but a “middle way”.

FCA interim chief executive Christopher Woolard comments: “’The measures we have confirmed today will mean anyone who needs to can get help from their lender if they are still struggling to pay their mortgage due to coronavirus.

“It is important that if a consumer can afford to re-start mortgage payments, it is in their best interests to do so. Customers should talk to their firm about the best option available for them.”

Duff & Phelps compliance and regulatory consulting managing director Mark Turner says: “The FCA’s expectation that firms should contact customers about resuming payments and set up appropriate plans with those who can afford it is a clear instruction for firms to be proactive in their approach.

“Consumers must be aware that payment holiday is not free money and that interest will continue to accrue which will increase their indebtedness, and the amount that has to be repaid in time.

“Ultimately, firms and their senior managers will be held accountable for causing avoidable financial harm to customers who take a payment holiday, and firms must ensure they have a clear audit trail showing how they have adhered to FCA’s guidelines and expectations throughout the crisis.”