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Coronavirus – Mortgage Holidays explained

Coronavirus – Mortgage Holidays Explained. In response to Coronavirus, three-month payment holidays have been announced for all lenders that are members of UK Finance and the Building Societies Association (BSA). A moratorium has also been made on repossessions.

Lenders can offer a payment holiday of up to three months without the need to assess borrower circumstances. Applications can be made on a self-certification basis.

Key points

  • A payment holiday will be available to all customers who are up to date on their mortgage payments.
  • A payment holiday will also be available to all buy-to-let landlords whose tenants have lost income because of the impact of Covid-19. Landlords are expected to pass on the relief to their tenants.
  • Customers will still owe the money where a payment holiday has been granted and interest will still accrue, so if borrowers are able to make part of the normal mortgage payment to reduce the money owed or interest charges then they should consider doing so.
  • Firms will make every effort to ensure that the payment holiday does not negatively impact on borrower credit files.
  • If already in arrears, borrowers should contact their lender as soon as possible. Lenders will review any change in circumstances to ensure that payments remain sustainable.
  • If borrowers are already experiencing financial difficulty, lenders have also agreed a three-month moratorium on residential and buy-to-let possession action, meaning that no homes will be repossessed at this difficult time.

FAQs

What are mortgage holidays?

With a mortgage holiday, borrowers will not have to make any monthly mortgage payments for a set amount of time, in this case up to three months. Please note, the money is still owed and the interest on the mortgage still accrues during the 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.

How to apply?

If borrowers are concerned about making mortgage payments they should contact their mortgage provider as soon as possible. Documentation is not required; borrowers will just need to self-certify that their income has been either directly or indirectly impacted by Covid-19.

Buy-to-let landlords will need to self-certify that their tenant’s income has been impacted by Covid-19. Landlords are expected to pass on this relief to their tenants to ensure that they are supported during this time.

At the end of the payment holiday the lender will make 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 available to help you do this.

What will happen to credit scores?

Mortgage providers will make every effort to ensure that borrowers taking a payment holiday will not be negatively impacted on their credit score.

What should tenants do?

Tenants should contact their landlord or managing agent if they have problems paying rent. For landlords whose tenants are unable to pay their rent, they should contact the lender as soon as possible to discuss the options that may be open.

The terms/rules around this will vary from lender to lender. Please contact your mortgage provider directly for clarity. We will keep adding to this list as more information becomes available:

  • Bank of Ireland – 0800 169 9722
  • Bank of Scotland – 0345 850 0842
  • Barclays – 0800 022 4022
  • BM Solutions – 0345 850 5000
  • Danske – 02890046100 or 03456005775
  • Halifax – 0345 850 3705
  • HSBC – 03458500633
  • Leeds Building Society – 0113 225 7972
  • Lloyds – 0345 602 1997
  • Nationwide – 03457302011
  • Natwest 0800 400 9999
  • Santander: 0800 783 9738
  • Virgin Money – 03456028301

For details about the steps Ingard is taking during these unprecedented times, please visit: https://www.ingard.co.uk/2020/03/16/our-precautionary-measures-against-coronavirus/