Will coronavirus mortgage payment holidays be extended?
There’s some good news for property owners who have been hit financially by coronavirus – there is talks of extending mortgage holidays by three months.
What is the plan to extend mortgage holidays?
In March, when the first lockdown began, the government announced property owners could apply for a three month holiday on their mortgage payments.
The application for this scheme was due to end on 31st December but the Financial Conduct Authority (FCA) has proposed lenders extend the holidays.
Under the proposals:
- Customers who have not yet taken out a payment holiday will be eligible to defer payments up to a maximum of 6 months.
- Customers currently on a payment holiday will be able to extend this for another 3 months.
- Customers who have already taken a payment holiday will be able to apply for another lasting three months.
If the plans are brought into force, borrowers will have until 31st January 2021 to apply for a mortgage holiday. As with the first scheme, the deferrals would not be reported as missed payments on credit files but any interest that would have been paid will still accrue.
After the payment holiday ends, it is up to the lender to get in touch with customers to discuss their options going forward and agree on a way to make up the payments, such as extending the term of the mortgage or altering monthly payments.
Who can apply for a mortage holiday?
All UK homeowners who are up to date on their mortgage payments can apply for a mortgage payment holiday. Buy to let landlords whose tenants have been financially affected by coronavirus can also apply. If you’re a landlord and take advantage of a mortgage holiday, you would be expected to pass this relief onto your tenants.
Your lender won’t need to carry out affordability checks or require you to provide documentation. Homeowners will, however, have to self-certify that their income has been affected by coronavirus. If you’re a landlord, you’ll need to self-certify that your tenant’s income has been affected by the pandemic.
To apply for a mortgage payment holiday, you’ll need to contact your lender directly but only once the extension plans have been approved.
Learn more about mortgage holidays
If you’d like more information about mortgage payment holidays, please don’t hesitate to get in touch with FC Funding today on 01202 937880. As one of the leading commercial mortgage brokers in the South, we’re here if you need us.