One in six mortgage holders take virus payment holiday

The mortgage industry has granted 1.9 million payment holidays to struggling homeowners since it introduced measures to ease the pressure on borrowers three months ago, according to industry body UK Finance.
By Janet Harrison
Published 23rd Jun 2020, 11:45 BST

One in six mortgages are now subject to a payment deferral, which works out to £755 per month in suspended payments for the average mortgage holder.

Customers hit by the economic straits caused by the Covid-19 pandemic were quick to embrace the scheme; 1.2 million deferrals were approved within three weeks of its launch.

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Many homeowners will soon be coming to the end of the deferral period and UK Finance said that lenders will contact borrowers before then with a range of options to ensure they are supported through the coming months.

It said that borrowers who can afford to resume payments should do so, as it will always be in their best interests in the long run.

But it added that there was a range of options open to those who can’t, including a further full or partial payment deferral, a move to interest-only payments for a period, or extending the term of the mortgage to reduce payments, depending on the borrower’s circumstances.

Customers who have not yet applied for a payment deferral and are experiencing financial difficulties, and those requiring further support after an initial payment deferral, can still apply until October 31.

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Eric Leenders, UK Finance’s managing director for personal finance, said: “Lenders understand that many households will continue to see their finances squeezed as the pandemic continues, and we are working hard to ensure everyone gets the support suited to their needs.

“The industry has a clear plan to help homeowners get through these tough times, and whilst it is best for customers to restart their payments if they can, where this is not possible lenders are keen to help.”