Mortgage payment holidays extended for up to six months

Mortgage payment holidays are being extended for homeowners adversely affected financially by the pandemic.

The scheme was due to come to an end on Saturday, but the government announced, as part of fresh lockdown restrictions in England, that borrowers who have not yet had a mortgage holiday can request from their lender a halt on mortgage payments, that can last up to six months.

Those who have had their payments deferred already, can extend their mortgage holiday until they reach the six-month limit.

Last week, a study by the Joseph Rowntree Foundation found that 1.6 million households – or a fifth of all British mortgage-holders – were concerned about paying their mortgage over the next three months.

Borrowers who have already reached the maximum six-month mortgage holiday and are still facing difficulty making repayments, are being advised by the FCA to speak to their lender about a tailored support plan.

Robin Fieth, chief executive of the Building Societies Association (BSA), said: “Building societies and credit unions recognise the financial pressures on some households and will continue to work hard to support customers in the coming months, working closely with the FCA.”

The government has confirmed that mortgage payment holidays will not be recorded on borrowers’ credit file.

Some 2.5 million people have taken a payment break on their mortgage since the start of the pandemic, according to figures from UK Finance.

Eric Leenders, managing director of Personal Finance at UK Finance, commented: “Lenders are providing unprecedented levels of support to help customers through the Covid-19 crisis and stand ready to deliver ongoing assistance to those in need.

“The industry is working closely with the Financial Conduct Authority to ensure customers impacted by the new lockdown measures announced this evening will be able to access the most appropriate support. Customers seeking to access this support do not need to contact their lenders yet.”

The FCA will announce further details about the extended mortgage holiday scheme later today, but insists that borrowers who can afford to do so, should continue making repayments.

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One Comment

  1. jeremy1960

    I do wish that people would stop referring to a mortgage holiday, it is no holiday! It is a deferring of payment and interest, the longer this goes on, the more interest will accrue. The longer it continues the more the repayment will rise. There will now be landlords with feckless tenants who are not paying rent who will be paying for this for years.

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