Support for mortgage customers

Mortgage providers are ready to support customers who are experiencing issues with their finances as a result of COVID-19, including giving the option of a payment holiday.

Mortgage providers are ready to support customers who are experiencing issues with their finances as a result of COVID-19, including giving the option of a payment holiday.

If you are concerned about making your mortgage payments during this time, you should contact your provider at the earliest possible opportunity to discuss the options available.

Your mortgage provider can offer you a payment holiday of up to three months without the need to assess your circumstances. With a payment holiday you will not have to make your normal monthly mortgage payments.

Your lender can also offer you more tailored support according to your individual situation if you wish to go through a full assessment of your circumstances.

Key points

• A payment holiday will be available to all customers who are up to date on their mortgage payments.
• A payment holiday will also be available to all buy-to-let landlords whose tenants have lost income because of the impact of Covid-19. Landlords are expected to pass on this relief to their tenants to ensure that they are supported during this time.
• Customers will still owe the money where a payment holiday has been granted and interest will still accrue, so if you are able to make part of your normal mortgage payment to reduce the money you owe or your interest charges then you should consider doing so.
• Firms will make every effort to ensure that the payment holiday does not negatively impact on your credit file.
• If you are already in arrears, you should contact your lender as soon as possible. Lenders will review any change to your circumstances to ensure that payments remain sustainable.
• If you are already experiencing financial difficulty, lenders have also agreed a three-month moratorium on residential and buy-to-let possession action (from 19 March 2020), meaning that no homes will be repossessed at this difficult time.

What is a payment holiday?

With a payment holiday you will not have to make any monthly mortgage payments for a set amount of time, in this case up to three months.

However, it’s important to remember that you still owe that money and the interest on your mortgage still accrues during a payment holiday.

At the end of the payment holiday your provider will contact you to assess your circumstances and agree a manageable way for you repay the interest charges incurred and make up the deferred payments. Each lender will have a range of options available to help you to do this.

Will I be eligible for a payment holiday?

To be eligible for a payment holiday you will need to be up to date on your mortgage payments.

If you are a buy-to-let landlord, it will be available if your tenants have lost income because of the impact of Covid-19.

There a number of options available and payment holidays aren’t always the most suitable solution for everyone. By speaking to your mortgage provider, they can tailor the best option for you.

How do I apply?

If you are concerned about making your mortgage payments during this time you should contact your mortgage provider as soon as possible. You don’t need to provide any documentation; you will just need to self-certify that your income has been either directly or indirectly impacted by Covid-19.

If you are a buy-to-let landlord, you will need to self-certify that your tenant’s income has been impacted by Covid-19. Landlords are expected to pass on this relief to their tenants to ensure that they are supported during this time.

At the end of the payment holiday your provider will contact you to assess your circumstances and agree a manageable way for you repay the interest charges incurred and make up the deferred payments. Each lender will have a range of options available to help you do this.

How long will it take to for my provider to process my application?

Firms are doing their best to support their customers during these unprecedented times. However, the spread of Covid-19 is also having an impact on their own staff and applications will be dealt with as quickly as possible.

If I take a payment holiday what will happen to my credit score?

Mortgage providers will make every effort to ensure that if you take a payment holiday it does not negatively impact on your credit score.

What happens if I am already in arrears?

If you are concerned about the impact Covid-19 will have on your income, then you should contact your mortgage provider as soon as possible. Lenders will make every effort to support people already in financial difficulty and will make this process as simple as possible.

Mortgage providers have agreed to a three-moratorium (from 19 March 2020) on residential and buy-to-let possession action, meaning that no homes will be repossessed at this difficult time.

What if I don’t own my property but rent instead?

You should contact your landlord or managing agent if you have problems paying your rent. If you are a landlord and your tenants are unable to pay their rent you should contact your lender as soon as possible to discuss the options that may be open to you.

How will the possession moratorium work?

Key information: for lenders to ‘stay’ possession proceedings for 90 days

• Lenders will suspend all possession orders
• Lenders will not commence any court action, including putting the case to court or instructing on matters
• Lenders are able to issue a formal demand, so that the customer is aware of the money they owe and are informed that the case will (eventually) go to possession proceedings.
• This letter is valid for eight weeks, but firms will agree not to take any further steps until the end of the 90-day period
• There are exceptions for empty properties or where the customer wants the possession to go ahead
• In buy-to-let, lenders would still use a Receiver of Rent where appropriate but would not move to possession if the tenant could not pay