Mortgage payment holidays may be extended for up to 18 months to help borrowers who are struggling financially.

The extended mortgage payment holidays could be announced by the FCA as part of efforts to avoid thousands of people having to default on mortgages and having their homes repossessed, as first reported in The Times.

Following a Bank of England report predicting that two million could lose their jobs this year, before employment recovers next year, payment holidays of between a year and 18 months have been mooted in the interim.

An FCA spokesperson told Mortgage Strategy: “It is vital that, at the end of a payment freeze, customers have the advice and support they need, and are clear on the options available to them. We are currently working with firms, consumer and debt advice groups, and government, to consider what other forms of support may be needed when the payment freezes come to an end. But we have not yet made any final decisions. We will confirm our plans in the coming weeks”

The authority is set to hold a call on the matter with banks on Friday.

Thousands of customers who have already taken temporary payment holidays on mortgages, as well as on credit cards and other loans are due to come to an end of their arrangements in June or July.