Homeowners who turned to banks for help when they needed it could face much higher interest rates in the future or even be denied loans.

Banks have been accused of moving the goalposts after it emerged they could turn down requests from people who asked for help during the Covid-19 pandemic, despite promises it didn’t. would not affect credit records.

Anneliese Dodds, the fictional chancellor, called for urgent action to ensure homeowners are not disadvantaged.

Since March, those who were put on leave or are in financial difficulty may have sought help from their mortgage lender. About 1.9 million payment “holidays” have been granted so far during the crisis, affecting one in six mortgages.

Homeowners can now request a three months additional payment holiday and the city’s watchdog, the Financial Conduct Authority, said banks cannot leave a black mark on the credit reports of customers who encountered financial difficulties during the crisis.

However, the rules allow mortgage lenders to examine bank statements to see if a payment interruption has been made or to force customers to disclose that fact.

They can then use the information to decide on future demands, which means borrowers could be charged higher interest rates on credit cards, loans and mortgages in the future, or be denied all credit.

People could still be penalized even if their finances have recovered or have been never damaged in the first place. Koodoo, a mortgage data company, said 30% of homeowners who took a payment holiday did so as a precaution after fearing a loss of income.

Ms Dodds said borrowers would have done so on the understanding that it would not be held against them. She said penalizing clients goes against previous commitments.

“I call on the Chancellor to work urgently with the sector to ensure that the use of the holidays will not have a material impact on the ability to obtain credit in the future,” he said. she declared.

FCA guidelines for consumers initially stated that “taking a payment holiday will not have a negative impact on your credit report”, but it has since been amended to add that payment breaks could affect “future ones. credit ratings “.

MP Seema Malhotra, who co-chairs a parliamentary group on mortgages, said few people would appreciate the difference between credit reports and credit scores.

“The FCA must prohibit lenders from using the fact that a payment holiday has been taken to penalize customers when lending decisions are made or interest rates are set,” she said.

In addition, business leaders can be prevented from taking out mortgages on their own home if they have taken out a loan guaranteed by the government or employees on leave. Some administrators were told they couldn’t get a residential mortgage because the lender was concerned about the safety of their business.

A spokesperson for UK Finance, which represents the banks, said lenders could use a range of information to decide whether to grant loans.

He said banks need to make sure mortgages are affordable and that customers don’t have to borrow money they can’t afford to pay back.

This was echoed by the FCA, which said lending was a business decision and banks could use a range of tools to decide whether to grant loans and set rates.

Additional reporting by Marianna Hunt


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