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High Numbers of mortgage holidays

A three-month mortgage holiday was one of the measures the government offered a month ago to help those struggling with the financial effects of the pandemic. More than 1.2 million payment holidays have been offered by lenders to people affected by coronavirus, UK Finance, which represents the major banks said yesterday.

The total has tripled in the lasts two weeks. About 61,000 payment holidays a day are now being granted.  Banks have reported that their phone lines have been “extremely busy” and have urged people to look for information on line and apply via online banking.  They have also advised homeowners not to cancel their direct debits before a payment holiday has been agreed, because this would be treated as a “missed payment” and could affect their credit rating.

Under the terms set out by lenders, homeowners can apply via a fast-track system and will not have their credit rating affected, but interest will continue to rack up on their debt which they will have to pay at a later stage.  Buy-to-let landlords whose tenants’ income has been affected by the pandemic are also eligible for the 3 month break.  (source: The Times)