COVID-19 Mortgage Payment Holiday: What You Need to Know

6th April 2020 / in Contractor Mortgages & Protection Blog / by Gordon Hunter, MD

As the Covid-19 outbreak continues to affect the country, the government and mortgage lenders have responded with unprecedented support and help for borrowers.

Three-month payment holidays have been announced for all lenders that are members of UK Finance and the Building Societies Association (BSA), along with a postponement on repossessions.

What is a payment holiday?

With a payment holiday, borrowers will not have to make any monthly mortgage payments for a set amount of time, in this case up to three months.

However, it is important to remember that the money is still owed and the interest on the mortgage still accrues during a payment holiday.

At the end of the payment holiday the lender will be in contact to assess circumstances and agree a manageable way to repay the interest charges incurred and make up the deferred payments. Each lender will have a range of options to do this.

Who will be eligible for a payment holiday?

To be eligible for a payment holiday borrowers will need to be up to date on mortgage payments.

For buy-to-let landlords it will be available if tenants have lost income because of the impact of Covid-19.

There are a number of options available and payment holidays are not always the most suitable solution for everyone. By speaking to the mortgage provider, they can tailor the best option.

See below for web links to each lender about mortgage breaks.

Useful links as of April 2020

Download our Ultimate Mortgage Guide

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