We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
Mortgage lenders announced their support for homeowners when the national lockdown was first imposed in March. The support came for people whose income has been affected by the coronavirus pandemic, either through redundancy or reduced salary through the furlough scheme. The mortgage payment holiday provided flexibility in repaying mortgages by allowing homeowners to stop or reduce their monthly payments for a period of more than six months.
Has the mortgage holiday been extended?
Mortgage holidays have not been extended, as it stands, and are due to come to an end in October.
However, mortgage lenders have said they will continue to offer payment holidays to some financially vulnerable individuals, according to the Financial Conduct Authority (FCA).
While the scheme will be ending at the end of next month, the City watchdog said people with short-term financial needs will not be left behind.
From November, however, banks will not have any legal obligation to help out, and the FCA has confirmed taking a payment holiday once the scheme ends will affect a borrower’s credit rating.
This means that taking a mortgage holiday could affect the homeowner’s ability to borrow more money in the future.
The FCA said it will be “monitoring firms to ensure borrowers are treated fairly” once the payment holiday comes to a close.
Interim chief executive at the FCA Christopher Woolard said: “Some consumers will continue to be impacted by coronavirus in the coming months, or be impacted for the first time.
“Consumers in these situations will benefit from firms providing them with tailored support.
“However, it is very important that consumers who can afford to resume mortgage payments should do so for their own long-term interests and so that help can be targeted at those most in need.”
Eric Leenders, managing director of personal finance at banking trade body UK Finance said customers will be able to find the best payment holiday deals through their lender.
Mr Lenders said: “It is essential that customers go online or contact their lender to consider the best solution for them.
“Firms will be communicating with customers whose mortgage payment deferral is coming to an end to discuss the options available.
DON’T MISS
Mortgage UK: How Britons can cut their costs as payment holidays end [INSIGHT]
Martin Lewis explains simple way to save money on mortgage [EXPLAINED]
Mortgage holders to face a ‘very challenging period’ [ANALYSIS]
“Those who can afford to resume payments should do so, as it will always be in their best interest in the long run.”
Calls for the scheme to be extended as a whole have been made after a think tank warned many people could face losing both their jobs and homes this winter.
With mass redundancies predicted as the furlough scheme closes at the end of October, further support is needed to prevent people who become unemployed losing their house, according to a report from the Centre for Policy Studies.
It warned that even with the new Job Support Scheme, huge numbers of households will not be able to afford their mortgage repayments on reduced wages or if they’ve lost their jobs.
Two million people are expected to lose their jobs when the furlough scheme winds down on October 31.
Policy manager at the Joseph Rowntree Foundation Darren Bazter said: “Even before coronavirus hit, a third of homeowners were living in poverty.
“And as the economic fallout from the pandemic grows, that number is likely to rise.
“With the deadline for applying for a mortgage holiday rapidly approaching, now is the time for the Government to take swift action.”
Source: Read Full Article