By Over the last few weeks, COVID-19 has increasingly spread throughout the UK, resulting in the Government putting into place a series of social distancing measures to protect the citizens of the UK.
Since these measures have come into place, plus with the increase of people getting sick, one of the critical concerns that most homeowners and landlords alike have shared is how to pay their mortgage.
The Government announced a three months payment holiday for both homeowners and landlords who are unable to pay their mortgage because of the coronavirus.
Which lenders are offering payment holidays?
All lenders are required to offer payment holidays.
Some lenders are offering repayment holidays on mortgages and loans for customers affected by the Coronavirus outbreak. These include Royal Bank of Scotland (to include NatWest and Ulster Bank), Lloyds Banking Group (to include Halifax, Bank of Scotland and MBNA), and TSB.
Other lenders, such as Barclays, Virgin (to include Clydesdale and Yorkshire Bank), Metro Bank, Post Office, Co-Operative, First Direct and Santander are not offering currently blanket measures like this. However, they are offering to extend help to those affected on a case by case basis and are encouraging those who are experiencing financial difficulty to contact them.
Will I automatically qualify for a mortgage holiday?
Not all landlords will automatically get a payment holiday; your lender will require proof that you or your tenants have suffered financial hardship because of COVID-19. The criteria for holiday payments will vary from lender to lender, so it’s essential to speak to your lender if you are experiencing or reasonably expect to experience difficulties making your payments.
What happens to these payments?
Any deferred payments will need to be caught up in the future. Guidance from the FCA says that they should ensure that taking a payment holiday should not have an impact on your credit rating. You will still be charged interest during the payment holiday unless you are told otherwise by your lender.
How long will the payment holiday be?
The Government has currently announced that payment holidays should be for up to three months, but this may change. Some lenders may offer more than this depending on your circumstances.
If you can start repaying your mortgage before the end of your payment holiday, you should speak to your lender to arrange for your repayments to start.
How do I contact my lender?
Lenders are currently experiencing a significant volume of calls, so be prepared that it may take a bit longer than normal to get through to them.
For a comprehensive list of lender contact details, visit the Mortgages for Business website here.
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