In March this year, it was agreed with the Government that banks, building societies and other mortgage lenders should offer all existing mortgage customers the option of a three month mortgage payment holiday. This was subsequently extended to six months. If your finances have been affected by Coronavirus and you would like to request a mortgage holiday from your lender, you have until the 31 of October 2020 to apply. If you’ve already had a payment holiday of three months, you can request an extension for a further three months.
Mortgage lenders may continue to offer mortgage payment holidays to some financially vulnerable customers after the Government scheme ends, so if you feel that you need short term support you should talk to your bank or building society.
Mortgage payment holidays offer flexibility in reducing or stopping your mortgage payments. However, you may have to pay more over the long-term in interest. For this reason, if you can afford to make full or partial payments to your mortgage, you should attempt to do so. Taking a mortgage holiday could also affect your ability to secure any further finance in the future.
Your mortgage should be your priority debt. This means the consequences of not paying it are more serious than other debts. If your income drops and you are unlikely to be able to meet payments, it’s important that you talk to your lender as soon as you possibly can. If you are having trouble paying for your mortgage, your first step should always be to contact your lender. They want to help you to meet your repayments. Your lender can discuss your options with you and offer suggestions, including:
- temporary payment arrangements
- lengthening the term of your mortgage, or
- switching temporarily to interest-only repayments.
You’ll need to deal directly with your lender if you wish to apply for a mortgage payment holiday or extend an existing one. But, there may be other options. So please speak to me first if you can, particularly if you are considering a mortgage holiday and are nearing the end of your mortgage term.
If you have any questions or want to discuss your situation further please don’t hesitate to get in touch, I’ll be more than happy to help.
Your property may be repossessed if you do not keep up repayments on your mortgage.