Mortgage holidays offered during uncertain times

• • + What is a mortgage holiday?
  • A mortgage holiday doesn’t mean you’ll receive free money, it simply means you can relax a little as you won’t have to pay your mortgage for a few months until you’re back on your feet again.
• • + Will I still have to pay interest if I take out a mortgage holiday?
  • The interest will still need to be paid but not during the mortgage holiday period. The interest, plus the regular mortgage payments, will need to be paid once your usual payments resume as normal.
    For instance, if you have 20 years and three months left on your mortgage, you won't pay anything for three months, and then you'll see a slight increase in your monthly payments for the remaining 20 years, as you make up for the three month break you had. Lenders will check to make sure this will still be affordable for you in the long-run, and if it isn't, they'll discuss increasing your mortgage term instead.
• • + Will a mortgage holiday affect my credit score?
  • Usually taking a mortgage holiday would affect your credit score, but in this case, lenders are saying that it will not have any detrimental effect on your credit score, going forwards.
• • + If I've had a mortgage holiday before, can I have another one?
  • Yes, even if you've taken a mortgage break once already, you can still take another one.
• • + I'm not struggling to pay my mortgage at the moment, but I'm worried that I might in the future - what shall I do?
  • You should carry on paying your mortgage for as long as you can manage to. If you know you're going to struggle to make your next payment, the more notice you can give us the better, so please give us a call and we can discuss what your options are.
• • + Can anyone apply for a mortgage holiday?
  • It's specifically for those who are struggling financially at the moment. To apply, you'll have to be up-to-date with all your mortgage payments so far.
• • + I own more than one property. Can I apply for multiple mortgage holidays?
  • Yes, you can apply for multiple mortgage holidays, especially if your mortgages are with different lenders. If your mortgages are with the same lender then you may not be able to, but it’s still worth getting in touch with us to check.
• • + I have a joint mortgage – will this affect our application for a mortgage holiday?
  • This comes down to your own individual circumstances. For instance, if you’ve lost your job but your partner is still working, then you could still have enough money coming in to cope. Your lender will carry out affordability checks to see if this is the case or not.
• • + I'm already in mortgage arrears, can I still apply for a mortgage holiday?
  • Lenders are dealing with each application on a case-by-case basis, regardless of whether you're already in mortgage arrears or not.
• • + I took out a Help to Buy Equity Loan and I'm struggling to pay the interest fees - what help can I get?
  • If you took out the loan before 31st March 2015 (as the loan is interest-free for the first five years), you will also be able to apply for a payment holiday. A range of flexible payment options to defer interest payments for a period will be offered to support those households in difficulty.
• • + How soon can I start applying for a mortgage holiday?
  • As soon as you suspect you might struggle to pay your mortgage, you should get in touch with your mortgage adviser. The sooner you let us know the better.
• • + How do I apply for a mortgage holiday?
  • Give your mortgage adviser a call and we'll put you in touch with your lender.
    Lenders have created a fast track system to approve applications as soon as possible. Your lender might ask you a few questions to try to understand exactly what financial difficulty you’re in, but don’t worry about this, it’s just to make sure that a mortgage holiday is definitely the right option for you.
• • + When will my mortgage holiday start?
  • This totally depends on your circumstances and when you think you might not be able to pay your mortgage anymore, but you can decide this with your lender.
• • + Can I choose when to begin a payment holiday from a specific date?
  • Absolutely, yes. You can choose when is best for you to start your payment holiday.
• • + Are there any other alternatives to mortgage payment holidays if I don’t qualify?
  • Some lenders are allowing their borrowers to switch from repayment mortgages to interest-only ones for up to 12 months to help make payments more affordable. Your lender will go through what other options are available to you.
• • + Do I need to go through any affordability checks/means testing when applying for a mortgage holiday?
  • Yes, you’ll have to go through income and expenditure checks with the lender before a payment holiday is agreed. You’ll probably speak to the lender’s payments team who can identify how significant your financial pressures are.
    You’ll need your bank statements and any other evidence that shows how you’ve been affected by the coronavirus, such as a doctor’s note, a redundancy letter from your employee, or something similar stating you’ve been laid off or have had your working hours reduced.
• • + What happens when my mortgage holiday ends?
  • Make sure you get back in touch with your lender when your mortgage holiday comes to an end, as each lender will follow different procedures.
• • + If mortgage payment holidays are extended by the government, will my mortgage holiday automatically be extended or will I need to reapply?
  • Again, this depends on your circumstances, but it’s likely that it won’t be automatically extended. Your circumstances will probably need to be reviewed again to make sure a mortgage holiday is still the right option for you. We’ll keep updating this information though, as and when new updates are made public.
• • + I've just had a mortgage offer, will it still stand in three months?
  • This will be assessed on a case-by-case basis as different lenders have different offer validity periods. There is a responsibility to let the lender know if your circumstances have changed in the period between having and signing a mortgage offer and exchanging contracts. For instance, if a borrower had experienced a significant change in their income, or their income had stopped, then technically it would be valid but you’ll need to disclose to the lender that your circumstances have materially changed.
• • + What can I do if I'm struggling to pay the rent to my landlord?
  • If you can't afford to pay the rent, your landlord will not be able to evict you, so you'll also have some breathing space during this difficult time.
• • + I'm a landlord and my tenant can't afford to pay their rent. What happens to my mortgage?
  • Lenders have agreed that if you have a buy-to-let mortgage, you can also apply for a three month mortgage holiday by speaking to your mortgage adviser or lender.
• • + I own my property and live with a tenant who can no longer pay their rent, however, I do not qualify for a mortgage holiday. What can I do?
  • Unfortunately, there isn’t a lot you can do. As the mortgage would have been agreed based on your wage alone, and not taking into consideration rent payments from a tenant, then there isn’t much extra help you can get. You could perhaps speak to your lender about switching to an interest-only mortgage for 12 months, to see if this is an option.

Speak to your mortgage adviser

If you’re struggling with ongoing financial difficulty, mortgage holidays should not be treated as a long-term solution to this. They’re purely there to offer short-term relief for those struggling with their finances.

For more information about mortgage holidays, please get in touch with your mortgage adviser and they can put you in touch with your lender to find out if you’re eligible to apply.