Under the FCA proposals, mortgage borrowers who have not yet had a payment deferral will be eligible for two payment deferrals of up to six months in total.

In addition, borrowers who already have a payment deferral for a period of less than six months will be able to apply for another pause of up to three months.

Those who have resumed repayments after an initial payment holiday will be eligible for another payment delay of up to three months.

A payment deferral under these proposals will not be reported as missed payments on a borrower’s credit file. 

Under the FCA’s proposals, borrowers will have until 31st January 2021 to request a payment deferral.

Borrowers who have already had two payment delays of up to six months in total, who have agreed alternative support with their lenders, or for whom tailored support would be more appropriate to their circumstances, would not be eligible for the new proposed payment deferrals.

The FCA is also recommending that no one will have their home repossessed without their agreement until after 31st January 2021.

The regulator is asking for comment on the proposals by 10am on Thursday 5th November, with the final guidance published as soon as possible after the comment period closes.

•   Making every hire count in the new economy
•   FCA assists innovative companies to tackle Covid-19 challenges
•   FCA proposes firms provide 'tailored support' to mortgage borrowers who continue to face payment difficulties

The FCA is working with trade bodies and lenders on how to implement this as soon as possible.

Customers seeking to access this support do not need to contact their lenders yet, and are instead asked to wait for further updates, including from their lenders.

Sheldon Mills, interim executive director of strategy and competition at the FCA, said: "We are working with lenders to ensure enhanced support remains available to borrowers struggling financially following changes in the coronavirus situation across the UK.

"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.

"It is in borrowers' own long-term interest only to take a payment deferral when absolutely necessary."