Coronavirus and Mortgage Holidays
The Chancellor Rishi Sunak recently announced that homeowners who are affected by the coronavirus can apply for a mortgage payment holiday which can last for up to three months.
What is a mortgage payment holiday?
A repayment holiday is a short-term measure that allows you to take a break from making your contractual monthly mortgage payment for up to three months.
During the period, you will not have to pay anything, but your mortgage balance will increase as the interest will continue to accrue and will be added to the total amount you owe.
If you take a mortgage holiday, there are usually two ways in which you can arrange repay those missed payments.
Depending on the lender, you may be able to increase your monthly m repayments in the future or increase your mortgage term.
Who is eligible for a mortgage holiday?
Repayment holidays are only available to homeowners who are up to date with their mortgages and are not already in arrears.
If you have already fallen behind with your payments and you are experiencing longer-term financial issues you would be unlikely to be offered a mortgage holiday.
If this is the case, you should contact your lender to discuss your existing arrangements and any alternative options which may be available.
In addition to repayment holidays, other options can be considered, these could include the option of switching to interest-only payments for a limited period.
With the current low interest, it could be a good time to consider a remortgage.
How do I apply for a mortgage holiday?
Repayment holidays won’t automatically be applied, homeowners who are worried about meeting their mortgage repayments as a result of the Coronavirus should make an application by contacting their lender directly.
Lenders have streamlined their systems and are now allowing homeowners who are up to date with mortgage payments to ‘self-certify’ when applying for a mortgage holiday, which means that they don’t need to carry out a thorough check on your finances as they would if you were applying for a re-mortgage.
A list of lenders and telephone numbers are provided at the bottom of this post.
Does taking a Mortgage Payment Holiday affect my Credit File?
If your mortgage is not in arrears, a mortgage payment holiday should have no impact on your credit rating, and providing you maintain your repayments, you should have no problem remortgaging in the future.
Credit agencies have advised the banks that they shouldn’t record payment holidays as arrears or as missed payments when reporting information to them.
Borrowers should check their credit reports regularly to ensure the information is correct and up to date.
Although arranging a repayment holiday won’t harm your credit file, you should contact your lender as soon as possible, especially if you think that you might not be able to make your next mortgage repayment.
Will the recent cut in interest rates be passed on to borrowers?
Exactly what happens as a result of the base rate cut depends on what type of mortgage you have.
Base rate trackers usually change a month after the base rate changes.
Variable rates may fall in time providing the new rate remains low for a prolonged period.
There will be no changes to fixed-rate mortgages no matter what happens with the base rate.
Bank and lender phone numbers:
Listed below are the numbers that you need to ring if you need mortgage relief. This list is subject to change as some lenders are now introducing specific helplines for Coronavirus.
If your bank isn’t listed yet and they have issued no specific coronavirus payment relief advice.
- Accord Mortgages: 0345 1200 866
- Aldermore: 0333 221 1000
- Bank of Ireland: 0800 1699 722
- Barclays: 0800 022 4022
- BM Solutions: 0345 850 5000
- Clydesdale Bank: 0800 121 4203
- Coventry Building Society: 0800 121 8899
- Digital Mortgages: 0333 399 0050
- Halifax: 0345 850 3705
- HSBC: 03457 404 404
- Kensington: 020 3827 8940
- Leeds Building Society: 0113 225 7972
- Lloyds: 0800 783 3534
- Nationwide: 0800 464 30 30
- NatWest: 0800 092 9585
- Norton: 0170 951 513
- Platform (Co-op): 01752 236 550
- Post Office (BOI): 0800 707 6206
- Precise Mortgages: 0800 781 8558
- RBS: 0345 721 2600
- Santander: 0800 01 56 382
- Scottish Building Society: 0345 600 4085
- Scottish Widows: 0345 845 8555
- Skipton Building Society: 0800 022 4022
- The Mortgage Lender: 0344 257 0427
- TSB: 0345 835 3380
- Vida Home Loans: 0344 892 0155
- Virgin: 0345 602 8301
The Mortgage Advice Service can help point you in the right direction, providing you with friendly, professional and confidential advice when you need it.
If you are serious about looking for a great mortgage deal and for mortgage advice that you can trust contact us at: www.themortgageadviceservice.co.uk or call us on: 0141 956 7756 / 0141 956 4088 / 0800 011 2322
The Mortgage Advice Service Scotland is a trading style of The Mortgage Advice Service (Scotland) Ltd which is authorised and regulated the Financial Conduct Authority.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.