Your Guide To The Three-Month Mortgage Holiday
Following the announcement from the Chancellor, the government are offering a three-month mortgage holiday to those inconvenienced by COVID-19. If you’re wondering what this means for you, we’ve created a brief guide that may make things a little clearer…
What is a mortgage holiday?
If you think you’ll struggle to make your monthly mortgage payments because of Coronavirus, your lender should be able to help offering homeowners and landlords a 3-month payment holiday. A mortgage payment holiday is a break from paying your mortgage, and won’t affect your credit rating…
Am I eligible for the mortgage holiday?
Having a mortgage holiday is a short-term fix to reduce the pressure on households. This won’t be the best solution for everyone. Under the Government guidelines you will be able to apply for a mortgage payment holiday if your finances have been affected by Coronavirus, you are up-to-date with your monthly mortgage payments (if you’re already behind on your mortgage payments, your lender may still offer a payment holiday but may require additional actions) and you have consent from everyone named on the mortgage.
Will I need to pay the money back?
It’s important to remember that a mortgage holiday is a temporary break from your mortgage payments, to help you through these uncertain times. There are a few things to consider before applying for a mortgage payment holiday, to make sure it’s right for your situation and each Lender will have their own rules
When your payments start again after the payment holiday, they may be recalculated, and you may see an increase in your monthly payments and the total amount of interest you could pay over the term of the mortgage might increase.
And normally you won’t be able to switch your mortgage to another rate (a Rate Switch or Product Transfer) whilst on a payment holiday. If you want to switch soon, please do speak to us before you take any action.
How do I apply for the payment holiday?
Before you contact your bank please get in touch with us. Where we can, we’ll check your situation and confirm whether it’s a good idea to start a payment holiday. Typically if your next payment is due in the next few days, your payment holiday may start the following month. The lender will confirm the details when they write to you confirming your payment holiday. Normally setting up a payment holiday can take up to 10 working days of you submitting your request.
If you, or someone in your household, has been affected by the coronavirus and you feel you may be unable to manage your mortgage repayments – please talk to us.
Should you have any questions, don’t forget we are a phone call or email away.