What you need to know about Covid-19 mortgage payment holidays
Posted onThe UK government has announced a mortgage payment holiday scheme to help mortgage borrowers affected by Covid-19.
Banks, building societies and other mortgage lenders are to offer an automatic three-month payment holiday for customers impacted directly or indirectly, covering both residential and Buy to Let mortgages.
What is a Mortgage Payment Holiday?
A mortgage payment holiday is an agreement entered into with your mortgage lender to stop your monthly mortgage payments for a set period of time. It is important to note that interest will accrue in the holiday period, and you will need to make up deferred payments in the future.
How do I apply for a Mortgage Payment Holiday?
You should contact your lender directly to apply, and many lenders have introduced dedicated phonelines.
Lenders have had a huge number of enquiries and borrowers can face very long waits when trying to make contact. Fortunately, several lenders have introduced online application systems with more being rolled out every day.
A good independent mortgage adviser or broker will be able to provide information on each individual lender’s policy, process and contact details in respect of the scheme.
Is there anything else to consider before applying?
Several lenders say they will not allow borrowers to apply for a rate switch if your current rate ends during their payment holiday, potentially leaving you on a higher rate than would otherwise have been available to you.
It may be that alternatives such as switching the mortgage to interest only, extending the mortgage term, or a remortgage to a new lender is more suitable for your circumstances.
If you’d like to find out more, please contact your adviser at Black Swan Financial Planning. Alternatively, contact our mortgage partner Altura Mortgage Finance by completing their contact form and they’ll be in touch.
Click here to go to their contact form.
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