The COVID-19 Mortgage Payment Holiday: What Does it Mean for You?

The situation regarding the coronavirus is fast-moving. Developments are occurring almost hourly, affecting all areas of our lives. It’s a sobering time. The initial concern many people had (and still have) regarding the virus itself has led to self-isolation, working from home, and many other social distancing measures. It’s also led to financial worries for many, as some businesses struggle to stay afloat. Measures are already being put in place to help those who are struggling. While some lenders had already offered support, the government has now made it official by offering a mortgage repayment holiday for those who need it. The government has said that anyone finding it difficult to make repayments on their mortgage can ask their lender for a payment holiday. This would last for up to three months. You should approach your lender directly to make your application if you are struggling. Indications are that all applications will be processed as quickly as possible. Make sure you get in contact with your lender before you miss a payment rather than waiting until you get into trouble. With mortgages making the biggest outgoing each month for many people, it’s vital that you apply for the break from payments as soon as you can. No, as all applications will be considered individually. However, if you are facing financial trouble, perhaps through losing your job or being paid for far fewer hours during the coronavirus crisis, you are likely to be accepted for the holiday. Be aware that you may need to provide proof of your circumstances, i.e. the drop in income, to be accepted. Many banks and buildings societies are providing more information on the measures they are making available for customers (which in many cases go beyond the now-government mandated mortgage payment holiday). Firstly, it won’t stop interest accruing on the amount owed on the home loan during the period that no repayments are made. This may mean adjusting monthly payments later in the term once the crisis surrounding coronavirus is over. You can ask your lender to explain more about the situation if you are accepted for the payment holiday, however. They are standing by and eager to help, with many offering helplines and online support too. Secondly, and perhaps more reassuringly at this time, it’s been confirmed that the credit ratings of those who take up the offer will not be affected by doing so. Once they get back on their feet and resume payments, things will continue as normal. The message here is to contact your lender if you wish to apply for the mortgage payment holiday now guaranteed by the UK government. It’s also worth staying up to date with the news, as the situation is regularly changing. More measures to help individuals and businesses ride out the storm are likely to be announced soon as well. Stay safe and remember to speak to your lender as quickly as possible if you are experiencing financial difficulties. You will all be worried about the impact of COVID19 on your ability to service your mortgage payments and while this is understandable, we urge you to not panic, and to take a look at your finances in detail. If you are in a position where you can afford to meet your next payment that is due, please do not call your lender. We are getting reports of clients facing hold times of hours (up to 10 hours to get through). Please be aware that the option to have a payment break has no time limit on it, so if you call next month, or even later than this, you will still be given this option to take a payment break. The option for payment breaks is for clients who are in true financial hardship. Lenders are not taking this lightly, and you will be expected to evidence that you do not have any income or savings to meet your mortgage repayments. If you are still getting paid your full wage, but just fancy taking advantage of a couple of months off paying bills, this will not be accommodated by lenders. It is also worth noting that payment breaks are only being granted if you can evidence that COVID19 is the direct result of your loss of income. Clients who are in arrears already will not be granted payment breaks. All parties to your mortgage must consent to the payment break, so you may be asked for a second (or third) application to confirm consent (whether this be written or verbally, we are unsure of at present) If a payment break is granted, this is not free money. The payments owed will be added on to your mortgage balance, and therefore increasing the number of months left on your mortgage term. Some lenders are detailing that your payments can increase after the payment break, to pay back the months owed, so please take this into consideration. You will not be able to remortgage or switch products while you are on a payment holiday so please call your adviser, before calling the lender, if you are aware of your rate expiring in the next 9 months. We are collating the contact numbers from lenders, and all lenders are now looking to implement an online request form. Please see below a list of the lenders and contact information for the lenders that have published assistance for clients – we will be updating this list as and when we receive new info LENDER TELEPHONE NUMBER WEB LINK Birmingham Midshires (BM Solutions) 0345 300 2627 (Option 5, Option 2, Option 1).  Coventry / Godiva 0800 121 8899  Nationwide  https://portal.nationet.com/Forms/Bespoke/Mortgages/PaymentHoliday TSB 0345 835 3380 https://www.tsb.co.uk/help/mortgage-repayment-holiday-request/ HSBC 03457 404 4041  Santander 0800 023 4603 https://mortgagesignup.santander.co.uk/onlinecredential/mortgage-holiday Natwest  [email protected] Ulster Bank  [email protected] RBS  [email protected] Accord – Resi 0345 1200 872  Accord – BTL 0345 848 0225   The mortgage was a complex case and Anthony was so helpful during the process. I probably would have given up if it wasn’t for his help. Anthony… Sev Menderes A brilliant service. As first time buyers Suzy and Jordan were on hand to answer a number of questions and their advice was massively appreciated.… Joe Fantastic professional service. Kristy