With coronavirus affecting so many people’s finances, one in nine mortgage holders in the UK have opted to take a payment holiday.
Around 1.2 million homeowners are currently delaying repayments as they face job cuts and reduced wages. Lenders have agreed that borrowers can delay a mortgage bill of up to £775 a month for up to three months.
The two weeks between 25th March and 8th April saw deferrals more than triple which works out at an increase of almost 850,000 per day.
These mortgage holidays do not affect credit ratings and it’s thought even more homeowners will opt to take this payment break as the pandemic drags on.
How do I take a mortgage holiday?
You should get in touch with your mortgage provider to ask about taking a payment holiday and to see if it’s a service that they offer. Please don’t simply cancel your direct debit without speaking to them first.
Phone lines will be extremely busy so if you can, it’s best to try and organise any payment holidays by filling out an online form that your lender should provide.
Stephen Jones, UK Finance chief executive, said: "Payment holidays aren't always the right solution for everyone. We would therefore encourage any mortgage customers concerned about their financial situation to check with their lender so they can find out more information on the support available and how to apply.”
We spoke about the fall in mortgage rates and a rise in people seeking to remortgage in a previous post, but as most homeowners are on fixed-rate deals they wouldn’t have seen a reduction in their current monthly mortgage bill. With incomes taking a hit, household finances have been put under enormous pressure which makes a mortgage payment holiday a real blessing for many people.
Looking to remortgage?
If you are in a position to remortgage then we can help. We’re leading mortgage brokers in Manchester, and will provide a personalised remortgage solution, designed specifically to fit your needs and circumstances. These are extremely difficult times for people, especially financially, and with the housing market in partial lockdown, it may take longer than usual to get things in motion. However, we’re here to help and can assist you in getting everything in place to submit applications once things get moving again. Contact us today and our team will be more than happy to help you.
