The Government has announced the requirement for lenders to extend the initial three-month mortgage payment holiday scheme by a further three months. They felt that the extension was necessary because it would be too sudden and soon to end the scheme now for those currently experiencing financial difficulties.
This means help and support will continue for those currently struggling with their mortgage repayments, providing borrowers already taking a holiday with the ability to extend their holiday period until 31 October 2020. Customers who haven’t yet requested a payment holiday, will be able to ask their lender for one up to this deadline.
If you can afford to repay your mortgage, it is in your best interests to do so. This is because interest will continue to build during the re-payment holiday period which you will still need to pay back at a later date – effectively meaning you will pay back more in interest in the longer-term. In addition, your monthly repayments after the payment holiday ends may also be higher, or your mortgage may take longer to repay.
However, if you are struggling to make your mortgage repayments because of Coronavirus, the new measures, which came into force from 4 June 2020, should provide much needed help.
- If you can afford to repay your mortgage, it is in your best interests to do so
- It is only a payment holiday if it has been agreed directly with your lender
- Cancelling your direct debit is not a payment holiday and counts as a missed payment. It could also show on your credit file – affecting your credit score and possibly impacting your ability take out credit in the future
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 one of our team first if you can, particularly if you are considering a mortgage holiday and are nearing the end of your current mortgage deal.
Before anything is agreed, your mortgage lender will have to provide you with enough information, so you can make an informed decision. Also, you should be aware that your lender will need to ask you questions about the changes in your circumstances, even if you are extending your mortgage holiday. So make sure that you have up-to-date information easily to hand and ready for this conversation. Lenders have committed to responding as quickly as possible, but due to high levels of demand and staff working from home, service levels might be slower than usual.
If you have any questions or want to discuss your situation further please don’t hesitate to get in touch, we’ll be more than happy to help.
The Oakwood Mortgage Team
Your property may be repossessed if you do not keep up repayments on your mortgage.