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:
The Financial Conduct Authority (FCA) has shared new changes to mortgage rules with the aim to simplify remortgaging, and encourage competition within the mortgage market.
5 days ago
Lloyds Banking Group has jumped on the bandwagon to boost lending for first-time buyers as they allocate an additional £4 billion to help first-time buyers on to the property ladder.
As the Loan to Income (LTI) cap has been increased to 5.5 times income, applicants who fit the First Time Buyer Boost criteria could borrow up to 22% more.
The government is introducing mortgage reforms to boost homeownership, stimulate economic growth, and make the housing market more accessible, especially for first-time buyers.
Chancellor Rachel Reeves has announced the most significant mortgage reforms in over a decade—great news for those dreaming of homeownership.
Nationwide ease their ‘Helping Hand’ mortgage designed to help first-time buyers get onto the property ladder by allowing them to borrow up to six times their income.
14 days ago
Keeping the kids entertained over the six-week summer holidays isn’t always easy, especially with the cost-of-living making it even more difficult. Below is a list of fun, inexpensive ideas to do over the break
The Financial Conduct Authority (FCA) has published a discussion paper about the future of the mortgage market in a bid to improve access for first -time buyers, self-employed, and those borrowing in retirement.
Ever wondered where the most reasonably-priced towns for families to buy are? Property company, Zoopla has identified the top 10 towns for families to live in the UK by looking at the most affordable towns, and how many people are looking in that area.
18 Jun 2025
There was a 32% increase last year in 100% loan-to-value (LTV) mortgages which are mortgages that require zero deposit. According to a recent report by chartered accountants and business advisers, Lubbock Fine, the reason behind this is buyers simply struggling to save enough for a deposit.