Lenders have now given over 1.6 million payment holidays to support customers affected by the coronavirus outbreak.
One in seven mortgages are now covered by payment holidays, according to the latest figures from trade body UK Finance. For the average mortgage holder, this represents around £755 per month in suspended payments. This money must be repaid at a later date, so homeowners will face slightly higher mortgage costs when their payments resume.
UK Finance reports that over a third of all payment holidays granted so far were approved between the 25th March and the 1st April, with lenders acting quickly to provide homeowners with the support they needed.
There is additional help for those coming to the end of their mortgage deal and looking to switch. Under normal circumstances customers on a payment holiday would not usually be offered a new mortgage deal, but lenders have agreed to allow product switches on like-for-like mortgages during these exceptional times.
Deals offered by your current lender could be more expensive however, so it’s important to compare these with deals available in the wider market.
Consider your other options
Payment holidays are likely to be crucial for those currently affected by the pandemic, helping to ease household finances during very uncertain times.
The three main credit reference agencies recently confirmed that the credit scores of homeowners who take a payment holiday will not be impacted.
Suspending mortgage payments may not be the best option for everyone however, and it’s important to look at the alternatives before deciding on the best course of action for you.
If you are simply looking to reduce your monthly outgoings for example, then the good news is that the remortgage market remains open for business, and lenders are gradually increasing the range of products available.
Get in touch with us today and find out if you can save money by switching to a better deal.
One in seven takes mortgage payment holiday