Martin Lewis explains mortgage holiday repayments – could they cost you an extra £200?

Mortgage payments could be threatened in the coming months as coronavirus impacts income and employment. To help with this issue, Rishi Sunak introduced mortgage holidays which will protect people for up to three months. Many welcomed this plan but some people have been turning to experts like Martin Lewis for further clarity.


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In mid-march, the Chancellor of the Exchequer laid out plans for new mortgage protection measures.

As Mr Sunak explained: “Following discussions with industry today, I can announce that for those in difficulty due to coronavirus, mortgage lenders will offer at least a three month mortgage holiday – so that people will not have to pay a penny towards their mortgage while they get back on their feet.”

On top of this, he also detailed that further support will be incoming as the crisis develops, reiterating that the government is prepared to do “whatever it takes”.

Despite these positive steps, it has been highlighted banks and lenders will likely add interest to repayments to recoup some of the money lost from the holiday.

Some people have revealed they have been quoted some worrying numbers.

Twitter user “LynnesyPatterson” reached out to Martin Lewis to flag what she found: “You were right about banks still adding interest to repayment holidays.

“We’re being stung for nearly £200 in interest that’s being added to the loan amount & we can only have April & June as repayment holiday.

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“This is scary, if we can’t pay in May, credit affected?”

Thankfully in response to this, Martin explained the large figures quoted are spread out over the remaining mortgage, severely lowering their overall burden.

In responding to the query, he had the following to say: “Don’t panic about mortgage holiday interest.

“Its added to total and spread over remaining years. EG:


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“Someone paying £700/mth with 20yrs left takes a 3mth mortgage holiday ie pay nowt for 3mths.

“Then for the remaining 19yrs 9mths it just means the new mthly payment is c£712.”

As these mortgage holidays were announced, several property themed companies produced mortgage holiday calculators.

These tools are often free to use and will help people work out how much their repayments will be once a holiday is completed.

The government details mortgage holidays are designed to support both mortgage payers and landlords.

Following the official announcement, the state issues guidance on how the system will work.

As the guidance details: “If you are experiencing financial difficulties meeting your mortgage repayments because of COVID-19, you may be entitled to a mortgage or rental holiday for 3 months. “This includes if you are a landlord whose tenants are experiencing financial difficulties because of COVID-19”

Many people are also worried about the impact mortgage holidays will have on their credit files.

Fortunately the FCA, the financial industry regulator, has ensured that there should be no negative impacts for them as they confirmed on their website: “Our guidance makes clear to firms that they should ensure that taking a payment holiday will not have a negative impact on your credit file.”

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