Mortgage Payment Holidays & Protection for Renters

The FCA has issued the below guidance:

Payment holidays

A ‘payment holiday’ means you agree with your lender that you will not have to make mortgage payments for a set amount of time. Payment holidays are designed to help you when you may experience payment difficulties – in this case because of the coronavirus situation.

It is important to remember that you still owe the amounts that you don’t pay as a result of the payment holiday. Interest will continue to be charged on the amount you owe.

This means that, at the end of the payment holiday, you will have to make up the missed payments. There will be various options for doing this, for example by increasing your monthly payments slightly, or by adding a short extension to your term. Your lender will be able to explain to you what options it offers.

Applying for a payment holiday

You should contact your lender if you think you may potentially experience payment difficulties as a result of the coronavirus situation.

Your lender shouldn’t need any evidence that your income has been affected by coronavirus.

Interest on your mortgage during the payment holiday

You will still be charged interest during the payment holiday, unless your lender has told you otherwise.

When the payment holiday ends

At the end of the agreed payment holiday, you will continue to make payments. And you will need to agree with your lender a manageable way to make up the missed payments given your circumstances. Your lender will explain to you the options that they offer.

If you are still not able to make your full mortgage payments due to coronavirus, then it may offer you a further payment holiday if appropriate to your circumstances.

Your credit score

Our guidance makes clear to firms that they should ensure that taking a payment holiday will not impact your credit score.

Agreeing the payment holiday

We expect lenders to offer payment holidays to borrowers who may experience payment difficulties as a result of the coronavirus. Many lenders have already committed to this.

Your lender may also offer other options if they are more appropriate for your circumstances, and where it is in your interest.

If you are behind with your mortgage payments.

You can still have a payment holiday. You will need to discuss this with your lender. It will consider whether a payment holiday is appropriate as well as any measures that are already in place to help you through your payment difficulties.

How long do I have to apply for a mortgage holiday?

If you think you may experience payment difficulties and may need a payment holiday, you should speak to your lender in good time before the next payment is due. Please be considerate of others when contacting your lender and allow those with much closer dates into the queue first.

You can apply for a payment holiday at any time before this guidance is reviewed in 3 months. The payment holiday will not start, however, until it has been agreed with your lender.

Contacting your lender at this time

Lenders have committed to responding as quickly as possible, but due to high levels of demand and staff having to work from home, service levels might be slower than usual.

Links to major mortgage lenders

NATIONWIDE –  https://www.nationwide.co.uk/support/coronavirus/mortgage-payment-holiday

HALIFAX – https://www.halifax.co.uk/helpcentre/coronavirus/

SANTANDER – https://www.santander.co.uk/personal/support/loans-and-mortgages/coronavirus-faq

VIRGIN MONEY – https://uk.virginmoney.com/contact/support-hub/coronavirus/

BARCLAYS – https://www.barclays.co.uk/coronavirus/

METRO BANK – https://www.metrobankonline.co.uk/coronavirus/coronavirus-personal-customers/

NATWEST – https://personal.natwest.com/personal/support-centre/coronavirus.html

LLOYDS – https://www.lloydsbank.com/help-guidance/coronavirus.html

HSBC – https://www.hsbc.co.uk/help/coronavirus/

RBS – https://personal.rbs.co.uk/personal/support-centre/coronavirus.html

Protection of Renters

The government has brought in emergency legislation to help protect those who rent by:

  • suspending new evictions from social or private rented accommodation while this national emergency is taking place
  • No new possession proceedings through applications to the court to start during the crisis
  • Landlords will also be protected as 3-month mortgage payment holiday is extended to Buy to Let mortgages

More information on the subject can be found here: https://www.gov.uk/government/news/complete-ban-on-evictions-and-additional-protection-for-renters

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