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
There has been a rise in both rent and mortgage costs over the last three years, with renters seeing a greater increase in their monthly payments than those with a mortgaged property.
Delayed Start Mortgages
7 days ago
The new Delayed Start Mortgage launched by Skipton Building Society allows first time buyers to postpone the first three mortgage payments. This product has been designed to help soften the blow of moving in costs for first time buyers.
Green Mortgages | Rewards and Benefits
9 days ago
Mortgage lenders are starting to recognise their “Green” responsibilities when it comes to the different products they offer.
A recent study by Boon Brokers where 1,000 people who had used an estate agent over the last year were surveyed, showed that a whopping 52% said they were pressured into using the estate agents’ in-house mortgage broker.
When will mortgage rates fall further?
19 days ago
Analysts are predicting further rate cuts this year, with the next one possibly coming down to 4% when the Bank of England’s Monetary Policy Committee meet on Thursday 7th August 2025.
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.
Lloyds boost lending for first-time buyers
26 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.
More information
Trusted by
