As of Friday 24th April, over 1.6 million UK mortgage holders have been offered a payment holiday by UK lenders to reduce difficulties from the financial impact of COVID-19. This means a suspended payment for the average mortgage holder of £755 a month.
One in seven UK mortgages are now covered by a payment holiday, following action from lenders to assist those who are suffering financial difficulties due to the Coronavirus outbreak.
Lenders are also continuing to support existing customers that have come to the end of their fixed-term by offering alternative products, subject to eligibility, that would enable them to continue with other payment structures.
It has also been announced that workers who have been furloughed due to Coronavirus will also be given help in the form of payment holidays and possible product transfers. Usual eligibility for product transfers whilst on a payment holiday have been altered due to the exceptional circumstances and lenders are permitting product transfers on like-for-like mortgages for homeowners who are financially struggling, without having the usual assessments for eligibility, meaning that existing customers who have been furloughed will also be eligible.
The scheme saw over 1.2 million mortgage payment holidays approved in the first 3 weeks with hundreds of thousands more being approved in the last few weeks by lenders quickly stepping in to help struggling mortgage owners.
Stephen Jones, Chief Executive of UK Finance said “Lenders understand that many households are seeing their finances squeezed due to the coronavirus pandemic and we are working hard to help customers get through these tough times.
“The industry has acted quickly to support homeowners through this crisis and has taken decisive steps to ensure that eligible customers on payment holidays due to Covid-19 can opt for the security of fixing their monthly mortgage payments going forward.
“There is a range of support available to mortgage holders concerned about their finances. We would encourage any homeowners impacted by coronavirus to visit their lender’s website in the first instance to find out more information and how to apply.”
The Intermediary Mortgage Lenders Association (IMLA) Executive Director Kate Davies also said “This agreement builds on the commitment made by lenders in July 2018 to contact customers who are coming to the end of a mortgage deal and discuss what alternative options might be available.
“It offers additional – and no doubt welcome – reassurance that customers will not be penalised if they have sought an approved payment holiday during this difficult period.”
Contact your Mortgage lender to find out if you are eligible for a payment holiday and if this is the best option for you.