We’ve put together this informative guide to help provide some clarity when it comes to mortgage holidays in the UK concerning the Coronavirus outbreak. If you have any queries or concerns about your mortgage, don’t hesitate to get in touch with us ASAP. We’re an independent mortgage brokerage and will do all we can to help you and answer any questions you might have.
How Does Coronavirus Affect My Mortgage?
On 17th March, Chancellor Rishi Sunak announced that anyone who is unable to make their mortgage payments due to the impact of Coronavirus can apply for a three-month payment holiday, but what exactly does that mean?
The UK Government announced that they will support households affected by the Coronavirus outbreak by asking all mortgage lenders to make available a three-month mortgage payment break to help with cash-flow and uncertainty due to the novel virus.
This means that your lender should allow you to make no payments for the next 3 months. The purpose of the policy is to ease the stresses facing homeowners during the pandemic.
Do I Qualify for a Mortgage Holiday?
This mortgage holiday is available to those affected by COVID-19 and are up to date on their mortgage payments. If you are already in arrears, you will need to contact your lender as soon as possible to discuss your circumstances and review your options
You don’t need to have been tested positive for the virus in order to apply for this payment holiday. It is available to anyone concerned about their ability to meet their mortgage repayments – due to a loss of work, reduction in pay, ill health or prolonged period of self-isolation, for example. The mortgage relief is also available to buy-to-let landlords whose tenants have been financially affected by Covid-19. Any landlords who take payment holidays are expected to pass this relief onto their tenants, and the government are taking steps to try and ensure no tenants are evicted as a result of this virus.
Will My Credit File/Score be Affected?
In a word, NO! Your lender should implement steps to help ensure that your credit score isn’t negatively affected during this relief and that the break IS NOT treated as missed mortgage payments. Lenders such as Barclays, Nationwide Building Society and NatWest, among others, have stated that their clients’ credit score won’t be adversely affected with almost all lenders following suit.
How Does It Work?
Although your mortgage repayment will change to £0 for up to 3 months (you might only need it for a month for example), it is worth noting that you may still accrue interest during this period, depending on your lender. This will mean that once the mortgage break period is over your mortgage payment may be slightly higher as the interest that you will not have paid will be added to the total debt that is still outstanding on your mortgage.
So, if you haven’t been affected by COVID-19 and are still able to meet your mortgage repayments, we recommend you continue to pay as normal.
How do I Apply for a Mortgage Holiday?
To apply for a mortgage holiday, you will need to contact your lender on one of the numbers listed below.
To confirm eligibility for a mortgage holiday, lenders would normally need to conduct an affordability test to assess your finances. This process will not apply during the pandemic, however. Instead, it will be replaced by a straightforward, self-certifying process. You won’t need to show any documentation, you only need to self-certify that your income has been affected (directly or indirectly) by COVID-19. Landlords applying for a mortgage holiday will be required to self-certify that their tenants’ income has been affected.
Your lender should supply you with adequate information about the implications of your mortgage relief, such as the consequences (if any) for the total amount payable under your mortgage contract, the term of your mortgage contract, and the amount of contractual monthly installments.
If the impact of coronavirus has affected your finances and you think a three month mortgage holiday is the right solution, get in touch with your lender and explain your situation to them. Be sure to ask them what other options are available since mortgage payment holidays are often only recommended as a last resort.
Below you will find the number to call for each lender…
Accord: 0345 1200 872
Aldermore: 0333 321 1000
Bank of Ireland: 0345 300 8000
Barclays: 0800 022 4022
BM Solutions: 0345 300 2627
Clydesdale: 0800 022 4313
Coventry Building Society: 0800 121 8899
Fleet:01257 916 800
Halifax: 0345 850 3705
HSBC: 0345 850 0633
Kensington: 0800 111 020
Kent Reliance: 0345 671 7274
Leeds Building Society: 0345 050 5075
M&S Bank: 0345 002 1127
Metro Bank: 0345 319 1200
Nationwide: 0345 730 2011
Natwest: 0800 092 9585
Newcastle Building Society: 0354 606 4488
Nottingham Building Society: 0344 481 1224
Paragon: 0345 849 4060
Platform: 01752 236 550
Post Office: 0800 169 9722
Precise: 0800 116 4385
Principality Building Society: 0300 333 4000
Sainsbury’s: 0800 923 1547
Santander: 0800 783 9738
Scottish Widows: 0345 845 0829
Skipton Building Society: 0345 850 1711
The Mortgage Works: 0800 030 4060
TSB: 0345 835 3374
Virgin Money: 0345 602 8301
Many banks and building societies, such as Royal Bank of Scotland, confirmed that they would offer mortgage holidays to coronavirus-affected customers before the Chancellor’s announcement, while other lenders are providing different forms of support – waiving missed payment fees and giving customers the option to switch rates, for example.
Contact Us to find out what other options might be available to you or make an enquiry with us to get independent advice from an expert mortgage broker and make sure you’re on the best mortgage interest rates!
