Coronavirus and mortgage payment holidays
The government announced in March that you can apply for a 3 month mortgage payment holiday if you can’t pay your mortgage
because of coronavirus.
On 22 May the financial regulator said that homeowners can ask their lender to extend their mortgage payment holiday by another 3 months.
What is a mortgage payment holiday?
A mortgage payment holiday is a break from paying your mortgage which has been agreed by your lender.
Read our guidance about what the UK’s 10 largest lenders are doing about mortgage payment holidays due to the coronavirus.
If you take a mortgage payment holiday you will need to make extra repayments in the future.
Interest will build up during your payment holiday, which means you’ll end up paying more in the long run.
You can ask your lender to reduce your interest rate during the payment holiday, but they don’t have to agree.
Should I take a mortgage payment holiday?
If you are struggling to pay your mortgage because of coronavirus, you should consider taking a payment holiday.
Another way to reduce your payments is to remortgage to a better deal. Use our remortgage calculator to see how much you could save.
You can also ask your lender for a partial payment holiday, or a payment holiday for only 1 or 2 months.
If you take a mortgage payment holiday, you might not be able to remortgage until your holiday ends and you start repaying your mortgage again.
How to get a mortgage payment holiday
Get in touch with your lender as soon as possible. You may be better off doing it online as there are long call queues.
You can apply for a mortgage payment holiday up until the 31 October 2020.
You won’t need to prove that coronavirus has affected you finances, but you will need to be up to date with your mortgage payments.
Because of the current situation lenders won’t do the usual detailed check of your finances when you apply.
They’ll trust that you give them accurate information.
You can, however, ask your lender to take a close look at your finances.
Taking a mortgage payment holiday because of coronavirus shouldn’t affect your credit score if you’ve got your lender’s permission. But check with your lender first.
How to extend your mortgage payment holiday
You can extend your mortgage payment holiday if your financial situation is still being affected by the coronavirus pandemic.
You should contact your mortgage lender as soon as possible to ask for your payment holiday to be extended.
How to pay the missed payments
There are usually two ways that you can pay the missed monthly payments at the end of the holiday.
increase your monthly mortgage payments
increase the number of months you pay back your mortgage
Remember that if you increase the number of months you pay your mortgage it’ll be more expensive in the long run as you’ll pay more interest.
Other ways to reduce your monthly repayments
There are other ways to reduce your monthly payments if you don’t want to take a mortgage holiday.
increasing the number of years you pay back your mortgage
switching to another mortgage
If you think you may not be able to pay your mortgage, get in touch with your lender
as soon as possible. Tell them your situation and ask them what your options are.