Mortgage payment holidays available for homeowners affected by coronavirus

Mortgage holidays offer a pause on repayments

The Government recently announced that both owner-occupiers and residential landlords whose finances have been impacted by coronavirus (COVID-19) can apply for a three month pause on repayments. This means that lenders will offer those struggling with a three month ‘holiday’, giving owners a temporary break from having to make mortgage payments during this time.

How can I apply for a mortgage payment holiday?

If you are experiencing or are expecting to face payment difficulties because of circumstances related to coronavirus, you should contact your lender as soon as possible.

As expected, lenders are currently experiencing high numbers of calls at the moment. Therefore, many have requested that those who are not in immediate difficulty apply for the payment holiday online, rather than on the phone.

Halifax, for example, have set up online applications for mortgage holidays, guaranteeing to reply to applicants via text message within three to five days confirming whether their request has been accepted or not. Lenders such as Lloyds, Nationwide, Santander and Bank of Scotland have also set up online applications.

Am I eligible for the mortgage holiday?

The option of taking a break on mortgage repayments is available to homeowners who are currently up to date with their mortgages and aren’t already in arrears. Other options will be made available if you have previously fallen behind with payments.

What information will I need to apply for a mortgage holiday?

Make sure you have your mortgage details on hand, including your account number, before contacting your lender.

You will not need to prove to your lender that either yours or your tenant’s finances have been impacted by coronavirus, either directly or indirectly, as lenders are allowing people to self-certify this.

Will the break have a long term impact on my mortgage payments?

While you won’t be required to make payments for the three months of your mortgage holiday, interest will continue to accrue on your mortgage – this will have to be paid off in the future.

Different lenders will have different approaches when dealing with this interest. Some will simply extend the mortgage terms by three months, while others will recalculate monthly repayments at the end of the three month period, enabling the payments to be made up.

I’m yet to move into my new home – am I eligible for a mortgage holiday?

Lenders have agreed to help buyers who have exchanged contracts and agreed completion dates by offering mortgage extensions of up to three months where the move has been impacted by coronavirus.

If you’re due to move imminently, you should speak to your lender to discuss your next steps. This could include:

• Keeping the terms of the existing mortgage offer, extending the offer expiry date.
• Pushing back the start date of your mortgage deal.
• Extending the mortgage deal to expire three months later.

Homeowners who wish to apply for the three month mortgage holiday should contact their lender as soon as possible to discuss their options.