Mortgage payment holidays for borrowers struggling as a result of the coronavirus crisis is to be extended by three months under new proposals announced by the government on Friday.
Ministers are also planning to extend the ban on repossessions until the end of October.
Over 1.8m payment holidays have been granted by lenders under the measures that were first announced in March and were due to come to an end in June.
The government says that where borrowers can afford to resume mortgage payments, it is in their best interest to do so, even if they cannot cover the full monthly amount.
All payment holidays must be agreed between borrowers and their lenders in advance of direct debits being reduced or stopped.
In its announcement on Friday, the government emphasised that payment holidays should not have a negative impact on borrowers’ credit files.
However, we would like to warn all our clients that taking a payment break may still hinder your chances of getting credit in the future as lenders may take this into account when carrying out their own credit scoring and affordability checks.
Borrowers who have yet to apply for a payment holiday will be able to do so until October 31.
Mortgage lenders will also be expected to extend support for borrowers who have already asked for a payment holiday, but are still struggling. This could be by extending the payment holiday or by offering reduced payments or interest only.
Lenders are expected to work with customers on the best options available for them, paying particular attention to the needs of vulnerable customers.
Beware! While you are not making your mortgage payments, you do still accrue the interest on the mortgage, which adds up over time. Our advice would always be to pay if you can.
For more information contact us or speak to a mortgage adviser on 01628 507477.
Related articles:
Recent posts
Here are the lowest fixed mortgage rates of the week, available to first-time buyers, home movers, buy-to-let, and those remortgaging.
Call us for more information: 01628 507477 or email: team@mortgagerequired.com.
The UK mortgage market is seeing lenders withdraw deals and hike mortgage rates amid the escalation of conflict in Iran. This isn’t great news for borrowers, with the average rate for a two-year fixed deal sitting above 5%.
Statistics now show that those looking to purchase a property would have to save a deposit bigger than their annual gross pay.
Analysis from the Office for Budget Responsibility (OBR) shows that those looking to buy their first home could face a sharp increase if house prices follow the latest predictions, as Coventry Building Society suggests.
According to Zoopla, four in 10 homes are now cheaper to buy with a mortgage than to rent due to lower-cost mortgages - a sign that ownership is becoming more affordable.
World Sleep Day Tips
13 days ago
There are many people who struggle with getting a good night’s sleep. Having poor sleep hygiene can be the reason for bad sleep quality in adults. Sleep hygiene refers to habits that can help you sleep better.
Here we have shared some tips to create a healthier sleep.
What you need to know about remortgaging
15 days ago
If your current fixed rate is due to come to an end within the next six months, you will want to start thinking about the options available to you.
Nationwide is the first lender to allow mortgage deeds to be signed electronically and without the need for a witness.
More information
Trusted by
